Transfer of experience (workers’ compensation)

A buyer who takes over a seller’s operation can ask whether the board will carry the seller’s claims history over. WorkSafeBC says its experience rating adjustment is a discount or surcharge on base premium rates, depending on how a firm’s claims compare with those of competitors. The sale-specific rules are in what happens to existing WSIB claims when a business is sold.

Ontario and British Columbia

• Ontario: WSIB’s Associated Employers policy says that if an employer closes and re-opens a business within a 12-month period, WSIB will transfer insurable earnings and claims experience to the re-opened employer if it substantially retains the same in the number of these areas the policy specifies: employees, clients, suppliers, business processes and equipment, health, safety and disability management programs, and management team. WSIB also says its premium rate-setting model has replaced its experience rating programs (NEER and CAD-7), which concluded in fall 2020, so confirm how the policy applies today.
• British Columbia: WorkSafeBC says that if you move your firm’s business operations, or a significant portion or aspect of them, to an affiliated successor, your experience rating will transfer to them.

What to ask

Ask the board how it treats the specific deal, and ask the seller for its premium and claims history. This entry covers Ontario and British Columbia only; check the rules where you are.