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we calculate base rates
WorkSafeBC uses a classification and rate making system to ensure the costs of compensation are fairly distributed. Employers in industries with similar claim costs pay similar base rates. The same base rate applies to all employers in a classification unit. The rate is expressed as an amount per $100 of assessable payroll. Experience rating adjustments may result in a discount or surcharge on your base rate.
Step 1: We roll classification units into industry groups
We take classification units for similar types of industries and roll them into industry groups. Berry farms, orchards, and vineyards are in one industry group, for example. Then, we calculate the historical cost rate for each industry group, looking at how much employers in each group have collectively cost WorkSafeBC (in terms of the ratio of their claim costs to their payroll). This helps us determine which rate group each industry group should reside in. Occasionally, a classification unit is large enough to form its own industry group. Supermarkets, for instance, form both a classification unit and an industry group.
Step 2: We roll industry groups into rate groups
To ensure rates remain stable, we combine industry groups into rate groups. Rate groups are made up of industry groups with similar historical cost rates. They may however, include employers from dissimilar industries. Hotels are in the same rate group as parking lots, for example, since they share similar historical cost rates. Some industry groups are large enough to form rate groups of their own. School districts, for example, form their own industry group and rate group.
Step 3: We calculate a base rate for each rate group
Base rates are calculated at the rate group level. First, we calculate the total claim costs for each rate group, then divide that by the group's estimated total assessable payroll to produce a cost rate. Employers in all rate groups also contribute to reserves for enhancement, disaster, and administration. This ensures one group is not unfairly burdened with costs. Each rate group is self-sufficient when it comes to cost. That is, all employers in the rate group pay for the cost of workers' injuries and diseases within the rate group.
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