Departure premiums confuse employers

Complainants: Not-for-profit agencies (employers)

Problem: Process for opting out of WSIB and calculating departure fees is difficult for employers to understand.

Resolution: Cases reviewed and clarified; premiums adjusted for one. Also, at the recommendation of the Commission, the WSIB created a new resource document for staff.

Ontario law requires most employers to have WSIB coverage. In return for premiums paid, the WSIB provides benefits to workers whose injury or illness is ruled work-related.

Employers who are not required, but volunteer, to pay premiums must pay a “departure premium” if they decide to end WSIB coverage. This can be complicated, and the Commission received complaints from several employers who found it difficult to navigate the departure premium process. They said they felt “scoffed at” and “dismissed” when they persisted in challenging or even trying to understand the calculations.

Here are two cases, both not-for-profit employers, one a childcare centre and the other a group home.

The childcare operator’s departure premium was set at $5,738 in 2015, slightly less than the 2014 figure offered, and about 30 per cent more than in 2007. It took several conversations with the Employer Service Centre, a five-month appeal, and several discussions with the Commission before the information was clear as to how the calculation was done, that the WSIB’s unfunded liability was partly responsible for the changing amounts, why the fee exists, and that payment plans are available with WSIB Collections to ease cash flow pressure.

The process and calculations were so confusing for the group home, that management hired a lawyer. Despite the fact that the WSIB’s unfunded liability was $3 billion less in 2014 than in 2012, the employer’s departure premium stayed much the same. Following the lawyer’s inquiries and the escalation to the Commission, the WSIB offered a departure fee of $441,931, down from the $597,537 first put to the employer. The WSIB neither acknowledged nor apologized for the error.

The childcare centre operator felt the WSIB Employer Service Centre was dismissive, something echoed by other employers who said calculations were poorly explained and the WSIB was slow to respond.

The Commission recommended the WSIB provide better resources to staff that deal directly with employers to:

■■ Avoid errors in calculation of departure premiums;
■■ Explain how calculations are done;
■■ Explain what grounds employers may have to appeal; and,
■■ Reply in a timely manner to employer questions.

WSIB staff is now working from a new resource document, “Understanding Departure Premiums”.