Have a question about the Nova Scotia Automobile Dealers Safety Association? While staff are always ready to assist, the information in the following series of Frequently Asked Questions may provide the information you are seeking.
WILL WCB ASSESSMENT RATES CHANGE RIGHT AWAY WHEN THE SAFETY ASSOCIATION IS IMPLEMENTED?
Unfortunately, no. Most Safety Associations need to be in place for at least five years before their industry rates begin to show signs of change. To some extent, this is due to the time it takes to develop services and promote the Safety Association’s programs to members. True culture and attitude change toward workplace safety takes time to implement.
A second, significant factor in the time it takes to see assessment rates begin to change relates to the way that industry rates are calculated by the Workers Compensation Board. Five years worth of claims experience is taken into account when setting rates. For example, to set the rates for 2010 (which happened in August 2009), claims data from 2004 through 2008 were taken into consideration. While more recent data is weighted more heavily than older data when calculating the rate, based on this model, it will be 2016 before the industry rate for NSADSA members are based entirely on years following the Safety Association’s implementation. There are many ways that individual NSADSA members can help us to maximize the time it takes to see our industry rate begin to change. Make sure that within your individual dealership(s) you are fostering a safety culture at all times. Require your employees to take courses offered by or promoted through NSADSA. Encourage your dealer colleagues to learn about the Safety Association. Encourage “nay-sayers” to understand the rationale behind forming the Safety Association. It is only by working together to achieve a safety culture that we will eventually succeed in reducing industry rates for all Safety Association members.
I ALREADY RECEIVE A CREDIT DUE TO MY GOOD SAFETY RECORD. WHY DO I NEED TO PARTICIPATE?
When calculating the rates for individual companies, WCB may apply an Experience Rate adjustment to your premium. This can be either a credit, if your safety record is better than average, or a demerit, if worse than average.
While the Experience Rate credit adjustment is something that all dealerships should strive for, it is not enough. New Car dealers will see a 15% increase in their WCB premiums for 2010 (not including the new levy), a rate that is set based on the claims experience rating of the sector. With this significant jump in 2010, dealerships have experienced an almost 50% increase in the base WCB rate for our industry since 2007.
The overall increase to the base assessment rate outstrips the benefits that an experience rating merit can provide to an individual dealership. Experience Rating Adjustments range from -10% to +20% for small employers, and from -30% to +60% for large employers. Unless our entire industry can implement significant changes to our approach and attitude toward a safety culture, our base assessment rate will continue to escalate. For more information on how WCB sets assessment rates, visit http://www.wcb.ns.ca/wcbns/index_e.aspx?DetailID=781.
HOW IS MY WCB RATE CALCULATED? CAN I INFLUENCE MY RATE?
The WCB rate that an individual employer is required to pay is based on several factors, all of which individual companies can influence:
Industry Rate – WCB creates groupings of industries with similar types of activity and similar levels of risk, to create an Industry Rate. Industries with similar experiences are grouped into Rate Groups. Each Rate Group is assigned a baseline rate, which is based on the claim-cost experience over a five year period for the entire rate group. The rate is adjusted each year based on the group’s new (running) five-year claim-cost experience. When industries work together to reduce their overall claims rate, rates can be lowered for the entire industry over time.
Experience Rate – individual employers receive a merit or demerit that reflects their own injury experience relative to other employers in their rate group. This ensures that the employers who have implemented good safety practices within an industry are rewarded, and the employers responsible for more claims pay higher premiums. Experience Rates are based on the ratio of new injury costs to payroll over a three year period.
Poor Performance Surcharge – if an employer consistently receives the maximum possible demerit on their Experience Rates due to high rates of injuries and claims, they may receive a surcharge in addition to their Industry Rate and their Experience Rate demerit. Surcharges apply to employers whose cost ratio is consistently at least 200% worse than the cost ratio in their rate group for four to six consecutive years (depending on company size). Surcharges can be significant, and are cumulative in nature. Employers who do not bring their claims rates down will pay higher surcharges each year.
Industry Levy – the 3.5% levy for the Nova Scotia Automobile Dealers Safety Association is calculated based on the total of the above three premium components. Therefore, the better your claims experience, the lower the levy you will pay to the Safety Association.
HOW IS THE SAFETY ASSOCIATION FUNDED?
All Safety Associations are funded by a levy on Workers Compensation Board (WCB) premiums paid by employers within the industry.
The levy is a percentage of the total WCB rate paid by an individual employer. For automobile dealers, the levy is 3.5%. Therefore, an individual employer would pay all components of their WCB premium (see the FAQ entitled “How does WCB calculate my premium?”) plus the 3.5% levy to get the total amount payable.
Example – New Car Automobile Dealership employer:
Industry Rate (2009): $1.62
Exp Rating adj: $0.14
Surcharge Rate: $0.00
WCB Rate Total: $1.76
3.5% Levy $0.06 <—- Safety Association Levy
Grand total payable $1.82
(All rates are per $100 of assessable payroll).
Once WCB has collected the levy, these funds are remitted to the Safety Association for the development and delivery of safety programs and services for Safety Association members. In some cases, Safety Associations generate additional revenues by offering other member benefits, by selling sponsorships, through advertising revenues, or by providing services to non-members, such as individuals in other industries. However, as a non-profit organization, all revenues must be reinvested in the Safety Association to better ensure that it meets its mission and best serves its industry members.
WHY DO NOVA SCOTIA’S AUTOMOBILE DEALERS NEED A SAFETY ASSOCIATION?
As is the case for all employers, new car automobile dealerships have a high onus of responsibility to ensure their workplaces are safe for employees. Dealers pay Workers Compensation Board (WCB) premiums to protect employee income in the event of an injury that results in time lost from work. In return, Dealers receive the benefits of participating in WCB programs, such as work modification and ,rehabilitation programs that encourage quick return to work for injured employees, and protection from employee legal action related to injuries and illnesses.
WCB premiums are determined based on industry AND individual employer accident experience rates. When an industry as a whole reduces its lost-time injuries, premiums can be lowered for the entire industry. This requires time, education, training, and co-operation to accomplish, but can result in significant savings to employers. For example, the construction and forestry industries, which have had safety associations for some time, have experienced drops of more than 20% on their base WCB premium rate for the industry over the past 10 years.
While auto dealers pay WCB premiums that are below the provincial average, they have increased significantly in recent years – 21% between 2007-08, and 9% between 2008-09. A Safety Association is a cost-effective, industry-funded and industry-directed way to protect the safety of employees in the new car retail automotive sector, and to control the significant personal and financial costs associated with lost-time injuries.
WILL PARTICIPATION IN THE SAFETY ASSOCIATION BE MANDATORY FOR ALL AUTOMOBILE DEALERSHIPS?
The Workers’ Compensation Board classifies employers by the type of business they operate, using Statistics Canada’s Standard Industrial Classification (SIC) codes. New Car Automobile Dealerships fall into SIC code 6311. In late June 2009, the Board of Directors of the Workers Compensation Board of Nova Scotia approved the formation of the Nova Scotia Automobile Dealers Safety Association by means of a contract put in place between WCB and NSADSA. With this contract in place, the Safety Association is able to implement the levy that will fund the Safety Association. Commencing with the September 2009 WCB Statement of Account, all employers in SIC code 6311 will be required to pay the levy, and all employers paying the levy are members of the Safety Association.
In some industries, such as construction, companies must have a safety Certificate of Recognition in order to submit tenders for a wide range of contracts. Because of this requirement, many individuals working in construction must participate in the training programs offered by the Construction Safety Association. Currently, no such Certificate of Recognition requirement affects automobile dealers, so the training offered by the Auto Dealers Safety Association will be voluntary.
While participation in the Safety Association’s training programs and safety services is voluntary, it is very strongly encouraged. Participation in the Safety Association’s training programs can help you meet Ministry of Labour safety requirements, reduce your rate of accidents and injuries, and ultimately lower the premiums that your dealership, and the industry as a whole, pays to the WCB.
Have a question not answered above? Send it to us at email@example.com or call the office at 902-425-2445.