Employers face 15% hike in workers' compensation rates

New Brunswick employers will face a 15 per cent hike in workers' compensation rates next year, and future increases are anticipated without legislative changes, WorkSafeNB announced Monday.

Employers are "very concerned" about the second increase in premiums in a row, which could force layoffs, and about the long-term viability of the workers' compensation system, said Joel Richardson, chair of the Coalition of New Brunswick Employers.

Meanwhile, a task force struck by the provincial government in response to last year's 33 per cent rate hike is expected to file a report with recommendations before the end of the year.

• Climbing WorkSafeNB rates sent for task force review

The 2018 assessment rate will be $1.70 per $100 of payroll, up from $1.48, said WorkSafe, citing rising claim costs.

The board of directors estimates the cost to manage the workers' compensation system will actually be $1.93 per $100 of payroll, which could have resulted in a 28 per cent jump.

But the board has instead revised its target of having 110 per cent of what it has to pay out in its fund to 100 per cent, and found a 16 per cent savings in administrative costs, acting president and CEO Tim Petersen said in a release.

Still, board chairperson Dorine Pirie said those measures "won't resolve the challenges facing the system in the long-term."

"To balance our goal of long-term sustainability while ensuring the security of benefits for injured workers and their families, the board expects that future rate increases will be needed under current legislation."

Richardson said employers are "very frustrated with WorkSafeNB and its ability to sustainably manage the system."

"Given the importance of the workers compensation system, it is financially prudent and necessary for us to take the time over the coming days to assess the new rate increase to determine its impact on the short and long-term viability of the overall system and the employers level of affordability," he said.

The companies represented by the Coalition of New Brunswick Employers employ nearly two-thirds of the province's private sector workforce and pay millions of dollars in WorkSafeNB funding to provide accident coverage in support of injured employees.

There's a lot of tough decisions that employers are going to have to make when they're faced with such substantial cost increases that they just can't keep up with.- Joel Richardson, Coalition of New Brunswick Employers

Although the 2018 rate hike is not as high as initially feared, it still comes on the heels of last year's 33 per cent spike and other increasing costs that take away from their bottom line, said Richardson.

"Employers are going to be faced with some very difficult choices — whether they're going to be able to afford to keep people working, whether they'll be able to afford to hire more people if they need people, whether they will potentially need to look at automating some forms of their operations.

"There's a lot of tough decisions that employers are going to have to make when they're faced with such substantial cost increases that they just can't keep up with."

​In May, then-labour minister Donald Arseneault announced a new task force would look into WorkSafeNB's escalating rates.

The auditor general also agreed to audit the Crown corporation, Arseneault said.

Richardson said the task force is scheduled to go to public hearings this fall.

A report with recommendations is expected before Christmas, he said.