WSIB Departure Fee

Published on 11:28 pm by in Employment

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Not-for-profit organizations with optional Workplace Safety and Insurance Board (“WSIB”) coverage must pay a sizable fee in order to withdraw from the plan. This departure fee came into effect in December, 1997 and is calculated regardless of an organization’s previous WSIB claims experience. Even organizations with no prior claims under the plan will be levied a substantial fee on cancellation of coverage.

Background
Coverage under the Workplace Safety & Insurance Act (WSIA) is compulsory for many industries in Ontario. It is not, however, compulsory for childcare centres and most not-for-profit organizations. Still, many organizations have chosen to opt for voluntary coverage under Schedule 1 of the WSIA. In December, 1997 the WSIB adopted the following policy with little publicity:

    “Effective immediately all eligible employers who cancel their application coverage under Schedule 1 of the Act [ed. note: voluntary coverage] will be charged a supplementary premium for the final year of coverage.

The supplementary premium will be calculated to ensure the amount realized is sufficient to meet all remaining financial obligations, including the employer’s share of the unfunded liability for the class or classes of which it is a part.”

Impact
An organization canceling voluntary coverage will have to pay out its pro-rata share of the unfunded obligations of all organizations in its class covered under the WSIB policy at the date of cancellation. Childcare centres wanting to opt out are being assessed eparture fees of in the order of $100 to $200 per child.

We suggest that all not-for-profit organizations with voluntary WSIB coverage call their WSIB representative to determine if the departure fee applies to them and, if so, how much it would be at the end of a particular year. Based on our discussions with affected organizations and the WSIB we understand that there is no process to plea for a waiver of this uncontracted-for departure fee. If you are thinking of obtaining disability coverage for your employees you should carefully consider all your options, including private and WSIB coverage. Costs to be weighed against benefits should include the future departure fee.

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