Some employers have consistently high costs relative to their peers, resulting in poor Experience Rating results over multiple years. The surcharge program targets these employers, focusing on those whose cost experience is at least 200% higher than their rate group over at least four consecutive Experience Rating statements. All employers potentially facing a surcharge are warned two years in advance.
The WCB applies surcharges beginning at up to 20% of an industry rate, and increasing to 40% in the second year, 60% in the third year, and so on, until the experience is no longer 200% higher than the industry average. The surcharge is limited based on how much higher the employer’s costs are than the 200% threshold. For example, an employer whose costs are 245% higher than average cannot be surcharged more than 45% of their industry rate.
The goal of the surcharge program is to encourage employers to invest in safety and return to work. We recognize that some of these investments can be costly.
That’s why we created the Conditional Surcharge Refund Program, which offers employers the chance to invest in health and safety, using the premium dollars associated with their surcharges. Rather than keeping these extra premiums, the WCB encourages employers to make qualifying investments in health and safety, and refunds the monies at year end.
Contact us for more details.
Policies related to the Surcharge Program
WCB Policy 9.3.1R1:
Classification, Rate Setting and Experience Rating Process
WCB Policy 9.3.3R1:
Data Used in Rate Setting at Rate Group Level
WCB Policy 9.4.2R4:
Experience Rating – Maximum Merit or Demerit or Surcharge
WCB Policy 9.4.3R1:
Data Used in Experience Rating
WCB Policy 9.4.4R2:
Claims Cost Which are Excluded from Experience Rating
WCB Policy 9.4.5R1:
Cost Used for Fatal Claims for Experience Rating