UNDERSTANDING ASSESSED PREMIUMS
WorkSafeNB uses a combination of components to determine an employers' premium for workers' compensation insurance coverage. The intent of the system is not to balance each insured employer's premium payment exactly to the insured employer's costs, but rather to group and assess employers by similar industry and accident risk.
How is my premium calculated?
WorkSafeNB premiums are calculated by determining an overall assessment rate, which is then charged annually to the employer per $100 of assessed earnings. Several factors influence the amount of each employer's overall assessment rate, as outlined below:
Employers are classified by type of industry (not by the occupation of each worker) and the classification is intended to reflect the total activities and output of the industry. New Brunswick's more than 14,000 employers are each assigned one of 789 industrial classification codes, as defined by the North American Industry Classification System (NAICS).
Employers are then sorted into one of 75 industry groups, according to their five-year accident costs, type of risk, and other factors.
Employers are next assigned a rate group according to their accident or hazard risk. For each rate group, a rate of assessment, levied per $100 of payroll, is set each year at the level estimated to yield sufficient revenue. Several factors influence the setting of assessment rates, such as: the recent injury and cost experience in each industry class, the current financial strength of WorkSafeNB, and other factors such as the prevailing economic environment and current adjudication policies.
Employers with an average annual premium of $2,000 or more are automatically assigned an experience rating, which acts as the final factor in calculating their premium. This rating allows their assessment rate to vary on the basis of accident experience. For example, an employer's rate is adjusted downward to a maximum of 40% or upward by as much as 80%, depending on whether that employer's claim cost experience compares favourably or unfavourably with the average claim cost of the rate group. This program is designed to reward employers with few and less severe accidents or injuries with lower premiums, and provide a financial incentive to those with higher ratings.
What are assessable earnings?
Once an overall assessment rate is calculated for your business, it must be applied to each $100 of assessable earnings during the year in question. The resulting number is the premium you must pay to WorkSafeNB.
Assessable earnings, generally speaking, are comprised of all payroll and payroll-related monies, up to an annual limit, for the year in question. That means an employer is assessed on the gross earnings of a given worker, up to the yearly maximum, regardless of the period worked. Click for a complete list of assessable and non-assessable earnings.
OPENING AN ACCOUNT
To establish workers' compensation coverage, you must register your business with WorkSafeNB. To do so, you must complete an Application for WorkSafeNB Coverage form.
New employers who qualify for mandatory coverage are required to register with WorkSafeNB within 15 days of the start of the business and must provide specific information about their operations and an estimate of the assessable earnings for the calendar year.
Employers who qualify for mandatory coverage as a result of hiring their third worker are required to register with WorkSafeNB within 15 days of the start of the third worker's employment and must provide specific information about their operations and an estimate of the assessable earnings for the calendar year.
Alterations to your WorkSafeNB account
There are a variety of business circumstances that will have an effect on your WorkSafeNB coverage. If your business experiences any one of the scenarios outlined below, contact WorkSafeNB immediately.
Business status change (incorporation, etc.)
If your company changes its structure, it may be considered a "new employer" for WorkSafeNB purposes, and require a new account.
Going out of business
If your company has ceased operations, your annual WorkSafeNB premium may be adjusted to reflect coverage for the period leading up to the date operations ceased.
Purchasing another business
Before purchasing any existing business, you should obtain a clearance letter from WorkSafeNB. This letter will ensure there are no outstanding premiums owed by the previous owner.
COVERAGE FOR CONTRACTORS AND
Contractors and subcontractors who are not individually registered with WorkSafeNB are considered to be your workers for the purposes of workers' compensation insurance, since the contractors are regarded as being regular workers.
Contractors from New Brunswick
If your business has awarded a contract to a New Brunswick contractor, one of the following two situations will apply:
If the contractor you are doing business with is not registered with WorkSafeNB - because they employ fewer than three workers - you (the contractor's principal employer) will be assessed for their coverage, based on the gross amount of the contract. You are also permitted to deduct/recover from the contractor the portion of assessment for the labour and materials, hired equipment, courier/mail services and janitorial contractors. Labour-only contracts cannot be charged back.
If the contractor you are doing business with requires mandatory coverage with WorkSafeNB due to the number of workers they employ, you will not be assessed for their coverage.
Contractors from outside New Brunswick
When a contractor from another jurisdiction is awarded a contract for work to be carried out in New Brunswick, this contractor is required to register with WorkSafeNB if:
If neither of the above apply, you will be responsible for their
coverage, as noted above in the "Unregistered Contractor"
A clearance certificate is a WorkSafeNB document that states in writing that a business in question has workers’ compensation coverage and that the business does not have outstanding premiums owed to WorkSafeNB. An up-to-date clearance certificate should be requested before making any arrangement to do business with a contractor. Without a clearance certificate stating the contractor does not have any outstanding premiums owed to WorkSafeNB or their local board or commission, your business is liable for:
(i) any unpaid assessments; and
(ii) any assessment related to work carried out by an unregistered contractor.
Please contact WorkSafeNB's Assessments inquiry line at 1 800 222-9775 or visit WorkSafeNB’s Clearance Request System page to determine if your contractor or subcontractor is in good standing with WorkSafeNB.
For assessment purposes, you must submit to WorkSafeNB annually a complete list of the contractors with whom you have entered into business relationships.
WORKING OUTSIDE NEW BRUNSWICK
Workers' compensation insurance coverage may be extended beyond New Brunswick in cases where a worker is employed by a New Brunswick employer and works temporarily outside the province.
There are two types of coverage a New Brunswick worker can receive, when working outside of the province:
Temporary coverage from the receiving jurisdiction
To obtain temporary coverage outside New Brunswick, the employer must communicate with the receiving jurisdiction (Commission or board of destination) to determine whether coverage is mandatory in that jurisdiction. When coverage in the receiving jurisdiction is not mandatory, WorkSafeNB can recommend that coverage be extended.
Extended WorkSafeNB coverage
To apply for extended WorkSafeNB coverage, the employer must:
To qualify for this coverage, the individual's usual place of employment must be within the province of New Brunswick.
In either of the above cases, the employer must provide a written request – in advance of the workers' departure from New Brunswick – to WorkSafeNB (or board) in question, containing the names of the workers requiring coverage, their destination and corresponding time period.
It is important to note that an extension of coverage for workers temporarily outside New Brunswick does not provide either employers or workers with immunity from litigation outside the province. Only a registration with the other jurisdiction provides such immunity.