Ontario Proposes Protection for Employers from Unexpected WSIB Costs in 2021

On December 8, 2020, the Workplace Safety and Insurance and Amendment Act, 2020 (Bill 238) (“the Bill”) passed first reading in the Ontario legislature. The Bill will, if passed, protect employers from an unexpected increase in Workplace Safety and Insurance Board (“WSIB”) premiums. WSIB premiums and the Maximum Insurable Earnings Ceiling are both directly tied to the Average Industrial Wage (“AIW”), which typically increases 2-3% in any given year.[1] Due to COVID-19 and significant layoffs of low wage workers in the retail, hospitality, and service industries, the AIW increased by 7.8% in 2020.

This unanticipated increase would represent a significant cost to employers, many of whom are already struggling financially as a result of the pandemic. To counteract this, Bill 238 proposes to limit the impact of the AIW on WSIB premiums to 2% for 2021. The corresponding 7.8% increase in the earnings ceiling for workers will not be altered, thereby ensuring that workers are fairly compensated for work-related injuries and occupational diseases.

Our team will continue to monitor the progress of Bill 238 through the legislative process and will provide updates accordingly. If you have any questions regarding this post, please reach out to any member of our Ontario Labour & Employment team.

[1] AIW represents the mean hourly wage of pay for workforce members of a geographic area, excluding farm employees.