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Brownstone School District, Alberta
Brownstone School District
To avoid the costs associated with suing an employer for recovery of expenses and losses associated with a workplace injury, provincial governments have instituted a no-fault workers' compensation fund designed to cover these expenses (National Institute of Disability Management and Research, 2011, p. 12-13). Most employers are required to pay into this fund and the assessment rate is determined by the expected injury rates for specific industries, the size of the payroll, and claims history. A covered injury must occur during and due to employment. In Alberta these claims are administered by the Workers' Compensation Board of Alberta (WCBA).
Problems in the Brownstone School District
The maximal insurable earnings for workers' compensation in Alberta in 2011 was set at $82,800 (WCBA, 2010a), so the maximum payroll amount that can used to determine the workers' compensation assessment for...
The amount budgeted for base salaries was $111,000,000, and with benefits $137,000,000, but in Alberta, pension and retirement benefits are not used to calculate assessments (Association of Workers' Compensation Boards of Canada [AWCBC], 2011, p. 5-6). The payroll total used to determine the workers' compensation assessment rate for the Brownstone SD would therefore likely be somewhere between $111 and $137 million.
The industry group that covers school districts and K-12 schools in Alberta is Division 'O' Education Services and the base assessment rate is $0.83 for every $100 of payroll (Association of Workers' Compensation Boards of Canada [AWCBC], 2011, p. 94). The Brownstone SD can therefore expect to pay an annual assessment rate between $0.92 and $1.14 million, which classifies them as a large employer (AWCBC, 2011, p. 16).
As a large employer the Brownstone SD could experience up to a 40% surcharge for…
Possible Solutions
Based on the information provided, at least twenty 'lost time' claims have been submitted by Brownstone SD employees over the past five years and the actual number is probably much higher. With such a high rate of lost time claims the Brownstone SD has probably already been given a poor experience rating and assessed a surcharge (WCBA, 2009, p. 4-6). Many of these claims appear to be indefinite, and with new claims being filed each year the number of ongoing lost time claims will likely increase. At some point a poor performance surcharge will be assessed, if it already hasn't been.
One of the most obvious solutions would be for the Brownstone SD to join a larger school district, such as the neighboring large city, thereby diluting the number of claims over a much larger employee population. Since the larger school district could end up paying a surcharge because of the inherited workers' compensation claims, the merger could be dependent on Brownstone's ability to reduce the number of claims over a defined period. The money saved in terms of workers' compensation assessment fees could then be used to institute several
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