Classification unit (WSIB rate group)
A classification unit, or rate group, is a category of employers used to set workers’ compensation premiums. In Ontario, the WSIB refers to a predominant rate group “under the old system” and now assigns one or more six-digit NAICS industry classification codes based on the business’s activities, and says the rate it charges reflects industry and experience.
A buyer meets the classification of a target when reading its WSIB account, or when the buyer plans to run the business differently. The WSIB’s own page refers to a predominant rate group “under the old system”. See what a WSIB clearance certificate is for the related Ontario document.
How it works
The Workplace Safety and Insurance Act, 1997, section 81, has the WSIB apportion the total premiums among classes, subclasses and groups of employers and set the rates for each. The WSIB says it sometimes audits businesses for proper class and subclass classification. This entry covers Ontario only; check the rules where you are.
What to ask
- Which classification codes the target’s account carries, and whether they match what it actually does.
- Whether the WSIB has audited the account or changed the codes.
- Whether the buyer’s plans for the business change its activities, and how to raise that with the WSIB.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Workplace Safety and Insurance BoardRegulatorUnderstanding your rate
- 02Government of Ontario (e-Laws)GovernmentWorkplace Safety and Insurance Act, 1997, S.O. 1997, c. 16, Sched. A
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