Workers’ comp changes present challenges for employers

Back in November, the B.C. government gave Royal Assent to major changes to its workers’ compensation legislation.

These include the establishment of a Fair Practices Commissioner, expanded access to health professionals, interest on compensation benefits, and a claims suppression amendment.

And just recently, two big amendments were approved thanks to an order-in council, so HR would be well-advised to start preparing for the new rules coming into force on Jan. 1, 2024.

Duty to cooperate with return to work

The two notable changes for employers involve the duty to cooperate and the duty to maintain employment, according to Michelle Jones, partner at Lawson Lundell in Vancouver.

For the first, there was language in the previous act around the “general understanding” or expectation that both employers and workers had a duty to cooperate. But there wasn’t a “concrete, legal obligation,” she says.

“This definitely puts that in place and outlines with clarity what the precise requirements of that are.”

While the new rules may need some “fleshing out,” says Jones, “at this point, we at least know what the core duties are in terms of contacting each other as soon as practicable after an injury, and then maintaining that communication; and then identifying together what's going to be suitable work for that person returning; keeping the board informed of what the status quo is on that person… and then both parties have the duty to respond to any inquiries from the board.”

The new legislation — Bill 41, Workers Compensation Amendment Act (No. 2), 2022 — more clearly lays out the rules and “also has teeth,” she says.

“They've put in provisions where if a worker doesn't meet its duty in those four things that I've just described, then the board can make a determination to essentially pull some of the payments that they've received to reduce or suspend payments of compensation for the worker until they comply. So, if they go silent for two months, the board can say, ‘Well, we're going to reduce your benefits.’”

Similarly, if an employer doesn’t meet its obligations, and goes silent or isn’t engaging when the worker is keen to return, they can be at risk of an administrative penalty, says Jones, adding that those penalties can be up to the maximum wage amount for the year, though further details are needed.

Plus, the more wage loss that’s paid out on a claim, the higher the claim costs are, which can affect an employer’s annual WCB premiums, she says.

“For an employer, a really key part is to get someone back to work as soon as they are able to do some duties, if you have those duties that they can do, because it then takes away those additional claim costs.”

Recently, B.C. also introduced new pay transparency legislation that will require all employers to include wage or salary ranges in all publicly advertised jobs.

Duty to maintain employment

The other big change is about maintaining employment, both when a worker is injured and coming back to work — but it’s important to note that this only applies to certain workers, says Jones.

“For it to apply, the worker has to have been with that employer on a full-time or part-time basis for a continuous period for the previous 12 months. So it only… applies to long-term employees, that's the first restriction,” she says.

“The bigger one is it doesn't apply to any employers who regularly employ fewer than 20 workers.”

The actual duty involves bringing a person back to work, and if a worker is fit to work but not fit to carry out the essential duties of their pre-injury work, the employer must offer them the first suitable work that becomes available.

If a worker is fit to carry out the essential duties of the worker's pre-injury work, an employer must offer that pre-injury work to the worker or offer alternative work “of a kind and at wages that are comparable to the worker's pre-injury work and wages from that work,” says the legislation.

And there's a slight condition on that, says Jones.

“There's an expectation that you will make changes to the workplace to accommodate those to the point of undue hardship.”

It’s a higher standard than most other provinces, she says, and it’s likely WorkSafeBC will outline how employers can determine a comparable wage and comparable work.

And while “undue hardship” make be a familiar term when it comes to employment law, the question is whether the board will use its own definition in its policies, says Jones.

Seven in 10 (70 per cent) of workers who were injured on the job still experience pain 18 months after the incident, according to a previous report.

Costs to breached obligations of workers’ comp

Also concerning? If there’s a disagreement in B.C., either the employer or the worker can go to the board for a determination as to whether a worker, one, is fit to carry out the work that’s being offered and, two, whether the work meets those criteria or is suitable work for them.

“If the board finds that as an employer, if you breached your obligation, you [may] have to pay an amount equal to what the worker was entitled to had they remained on temporary or total disability — so there's financial consequences to the employer not meeting this obligation,” she says.

Lastly, if an employee is terminated within six months of returning to their pre-injury job or a comparable job, there’s an automatic assumption that the employer has failed to comply with its duty to maintain employment.

“The only way you can rebut that is by proving to the board that you terminated them for some other reasons,” says Jones.

As a result, employers will have to carefully consider these types of employee terminations.

“Whether it was a with cause or whether it was reducing the workforce, you're going to have to be able to show that the termination of this particular worker was in no way related to the fact that they've just come back from a workplace injury,” she says.

How employers should prepare for workers’ comp changes

For many employers, the hard part will be not having a standardized communication system or policy that they can apply for when workers return to work, says Jones.

“One recommendation I have for employers is to turn your mind to developing some form of what's the standard going to be,” she says, and it will have to be adjusted. For example, having checkins every month or every week for longer-term absences or daily checkins for shorter absences.

“You're going to have to have a policy turning your mind so that these things don't slip through the cracks. And you don't go for weeks on end without having communication, because that way you could be at risk of not meeting the duty to cooperate if you go silent for a long period of time, and the worker’s reaching out to you continually, and you don't have a response to them on trying to find duties to bring them back, and a timeline for bringing them back.”

As for the duty to maintain employment, “that’s a tough one,” says Jones.

“There's some juggling there behind the scenes [for employers] of how much of it is do we create work versus how much is what's really, truly available? And I think it's going to become a matter of having to take stock in those issues… particularly around the decision-making processes if you’re going to terminate someone within six months of them returning to work.”

Rising costs for employers?

Overall, employers understand the changes, according to Greg Wilson, director of government relations at the Retail Council of Canada in Vancouver.

“It's honestly very hard to take issue with the intent of the changes here… I think everybody wants workers to be able to return to work after injury.”

For a number of years, organized labour has expressed concern about people facing barriers in trying to return to work, and WorkSafeBC is responding in trying to ensure that workers are reemployed at equivalent jobs, he says.

“Our perspective is that our employers were already trying to do that, and we would hope and expect that they would continue to do that.”

But the big worry is around costs, says Wilson.

“It's not really because of these specific changes, it's a broader cost concern issue because these are only a small subset of the changes that WorkSafeBC has introduced in recent times,” he says.

For example, for the last 15 years, assessment rates have tended to be “steady and predictable,” says Wilson, but with the complexity of the recent changes, employers are concerned the costs will go up.

“I would expect that these [changes in law] will increase WorkSafeBC’s costs and WorkSafeBC's costs determine the assessment rate, because it's essentially an insurance scheme. So there have been now three years of increasing complexity, and so our expectation is, at some point, that has to result in increased assessment rates,” he says. “To this point, WorkSafeBC has essentially been drawing down reserves.”

And it's hard for retail as an industry, says Wilson, because it doesn’t fit uniquely into one assessment rate group.

“Last year, for example, we saw rates go up for convenience stores and quick-service restaurants, and supermarkets, but down for general retail and some other specific retail categories. So we have to look at this across a whole range of assessment rate categories, and honestly, over a few years, not just one year.”