Each year’s assessment rates must generate enough revenue to cover all current and future costs associated with that year’s workplace injuries, including health care, rehabilitation and wage replacement benefits.
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.
In addition to accident-related expenses, the assessment rates must also cover all expenditures for safety and prevention programs and all administrative expenses, and may include a funding adjustment to account for prior year deviations.
Watch our video to understand how assessment rates are set.
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.
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.
Non-assessable earnings, which employers are not required to report to WorkSafeNB, include taxable allowances for: