Saturday, November 23, 2013

Should Worker's Compensation be a shared responsibility?

We all know the reason for workers' compensation.   We give up the right to sue a company for injuries that happen at the workplace (although it is possible to sue another company that made the equipment responsible for the injury, in a product liability lawsuit).   In exchange the province's compensation board will pay replacement income.  It may be partial if we have to resort to modified work.  For example, if taking modified work reduces a salary by 15%, comp will pay an amount equal to 15% of after-tax income, since benefits are tax-free.  In some cases, it could be as much as 60% or more of after-tax if we are totally unable to resume work (the rest would be covered by a CPP or RRQ disability pension which is taxable).

In some provinces, a province's worker's comp board is just that, it is solely focused on determining compensation.

Some other provinces, however, have a dual mandate for the service  -- not just paying compensation for injuries but also trying to prevent injuries, in other words promoting workplace occupational health and safety.   These provinces include BC, Ontario and Québec (with their CSST).  That makes sense, we should have as an aim keeping injuries at work to a minimum -- after all, healthy employees reduces overhead related to the costs of workplace related absenteeism.

In all cases, though, the responsibility for paying premiums for worker's compensation is solely the responsibility of employers.   Employees pay nothing.  In fact, it is this payroll tax (anywhere from 1.12% to 2.75% depending on the jurisdiction) that many companies claim is a disincentive to expand their operations.

What I'm writing next is probably a very unpopular position.   But it is what I think. 

In Canada, the CPP / RRQ and EI programs are shared between employers and employees (1:1 for pensions, 1.4:1 for unemployment).

This is an issue that has made me curious for quite some time.    But after thinking about it, I think that worker's comp should also be a 1:1 proposition.   Here's why.

A company has as a primary duty the safety of its employees.   Whether it's in a factory or an office environment, people have the right to expect minimal to no disruption in their working lives.   This means safe factory equipment with guards to prevent injury, readily accessible eyewash stations, computer stations that minimize Carpal-tunnel syndrome incidents, and of course and sadly the stress that can result from sexual and other types of harassment.   And so forth.

But I think employees also have a reciprocating duty to contribute to workplace safety -- by avoiding risky behaviour.   The benefits that come with worker's comp aren't free, someone has paid for them.    I'm not just talking about slips and falls at the factory.   They also happen at the office, for example if you rush to make a turn around a supervisor's "platform" and you slam your knee into a sharp corner during that turn.   It also deals with harassment issues -- one just might think twice knowing their hard-earned money might be used to compensate for other people's physical and mental health costs.   (Of course, this should not mean the rogue is exempt from being personally sued.)

Certainly, no one should be penalized financially for unintentional accidents, or even incidents where their was just plain idiocy on one's own person.   In fact, firing an employee under such a circumstance should be illegal unless he or she deliberately endangered other persons.   And there should always be zero tolerance for racial or sexual harassment because of the mental health implications.

Given all of that, I've in my working life seen risky behaviour both at the factory and at the office.   And it bothers me that on this one item, employees think they can get a free ride.   As I said, nothing is truly free.  Giving workers peace of mind that they will be taken care of is part of our social safety net and it is a principle that should be protected.   But it should also mean that employees should take responsibility not just for their own safety as much as is possible, but for taking care of their fellow workers too and protecting their safety as much as employers should.   That's why an employee payroll tax for worker's compensation is warranted.

If employees had premiums deducted from their pay cheques (which would be fully tax-deductible, of course, just like the other payroll taxes) it might make them think twice before doing something inherently risky or just plain stupid.    And giving employers a bit of a break would be an incentive to hire new staffers.

This change doesn't have to be done overnight.   It can be phased in over four years to give us time to adjust.   But for the most part, the system we have is stuck in a World War I mentality (the period when most provinces set up their régimes).    It needs to change.   And making it a shared responsibility is one way to do so.


Anonymous said...

The employee's incentive for good safety practices is to not get injured or killed, and to avoid suffering from pain. As you pointed out, the financial compensation for injured workers is only a percentage of the lost wages. It is not a free ride by any stretch of the imagination. Yes, a few people scam the system, but those scammers are investigated and punished. The miniscule percentage of workers who are scammers is no reason to sabotage the current system by taking from the workers and giving even more to the bosses. The bosses already have the upper hand, and the imbalance is getting worse every day. That is not progress.

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