Company with strong safety record suffers a series of fluky incidents — and wonders how to control the damage.
(Q) We’ve had an almost comical run of bad luck where I work. And what’s ironic is that our HSE protocols are probably overkill, e.g., safety posters plastered everywhere, biweekly safety newsletters, safety meetings, safety bulletins, written procedures for safe use of a Philips screwdriver — you get the picture. Despite this, we’ve been struck by 4 or 5 freak incidents as of late (nothing serious I’m glad to report). But suddenly our normally low WCB costs are crazy high. Any tips to help us navigate the storm?
(A) When it rains it tends to pour doesn’t it. On occasion even the most airtight and stringent safety measures are outdueled by a chaotic universe. As the oft-repeated expression goes, excrement will happen.
And if fact, WCB is well aware of the unavoidable reality of accidents. This explains why premium calculations are statistically smoothed via moving averages over a three year period. The ‘smoothing-out’ or averaging of claims costs over multiple years (as opposed to a single year) is designed to mitigate the impacts of outlier incidents. This helps mightily when otherwise stellar safety records are snake bitten.
A tip? Here’s a good one. Premiums are based on assessable earnings. As assessable earnings rise, claims costs have a relatively lesser impact because they’re diluted by a larger denominator. Not following? Don’t worry about it. But chew on this: if, like many AB companies at present, your company’s revenue are higher than forecasted (and by extension, total payroll costs), then consider reviewing your payroll. Payroll (aka assessable earnings) should be updated as needed throughout the year to avoid WCB penalties, but the other benefit — for a growing company stung by bad luck — is that you claims costs will be more immediately diluted, thus blunting the adverse impacts of claims costs on your premiums.
To easily update your assessable earnings, visit myWCB.ab.ca. Click on Update my WCB Account and then select Worker Earnings. From there you can adjust as necessary.
