Compensation Café: Review: Petrie’s new Addendum on Claim Suppression in B.C.
Written by: Janet Patterson, WELLS Director
This blog series is meant to cover all things related to Workers’ Compensation. It is managed by one of our WELLS Directors, Janet Patterson.
My September blog “Claim Suppression -No More” reported some results of an independent review of the suppression of compensation claims in B.C. The review was conducted by the Institute for Work & Health, and Prism Economics and its report – Estimates of the Nature and Extent of Claim Suppression In British Columbia’s Workers’ Compensation System is available on the website of Institute for Work and Health https://www.iwh.on.ca.
The results showed a significant level of claim suppression in B.C.
This IWH review was commissioned by the board of directors, following a recommendation by Paul Petrie in his 2018 report, Restoring the Balance: A Worker-centred Approach to Workers’ Compensation Policy. Other Petrie recommendations have also been implemented and have benefited workers who have WCB claims.
But what about those workers who have been injured on the job but do not have claims with the Board? According to the IWH report, apparently there are a whole lot more of them than were previously recognized.
Petrie has now prepared an Addendum to his original report – Claims Suppression: The Elephant in the Workplace. This important document considers the IWH findings and makes 13 additional recommendations to the board of directors regarding claims suppression in B.C. It is also the subject of today’s blog.
NOTE: Petrie’s Addendum and the first report are available on the WELLS website, under the “Resources/Featured Research & Publications” tab.
The Petrie Addendum: “Claims Suppression: The Elephant in the Workplace”
In his Addendum, Petrie assesses the methodology of the IHW report and its surveys of both injured workers and employers. In his view, the representative surveys provide reliable estimates of the under-reporting of workplace injuries and related claim suppression activities in B.C.
Based on the IWH findings, Petrie makes the following estimates:
- He conservatively estimates that there were between 40,000 and 50,000 unclaimed work-related injuries to BC workers in 2019 alone; and
- Based on the data from the worker survey, Petrie estimates that there were approximately 225,000 days lost for unclaimed work injuries in 2019. By applying $225 per day injury costs to the 225,000 days lost he estimated that approximately $50 million was borne by injured workers, their families and the public through the taxpayer funded Medical Services Plan and other income support programs outside the accident fund contrary to the Workers Compensation Act (Act).
Petrie concludes:
This shifting of tens of millions of dollars of injury costs onto workers and the general public is inconsistent with the foundational principles of the Act and in my view undermines the integrity of the workers’ compensation system.
In his view, the pervasive nature of claim suppression in B.C. is the “Elephant in the Room” and he highlights following issues.
1. Under Reporting of Claims
Section 150 of the Act requires every employer to report any injury requiring medical treatment to the Board within 3 days of becoming aware of the injury.
However, the worker survey showed that of the 512 workers who reported a time loss injury to the employer, approximately 2/3rds (68.6%) indicated that the employer did not file a report of injury (form 7) with the Board. The employer survey indicated that 11.3 % of employers in their industry only reported time loss claims “sometimes”. Another 6% believe employers in their industry “rarely or never” report these injuries.
In preparation for writing the Addendum, Petrie requested information about the Board’s enforcement of section 150 of the Act through the Board’s FIPP office. The enforcement data for the 4 years between 2018 and 2021 showed that the Board conducted a total of 4 investigations under section 150 in 2018 and 2019 and no investigations in 2020 and 2021. The Board indicated that a record of the number of violations and the number of penalties for section 150 “does not exist and could not be produced”.
In the Addendum, Petrie describes the Board’s enforcement of the employer’s reporting requirements as “woefully inadequate” and concludes:
….an employer’s failure to report a known work-related injury to the WCB as required by section 150 of the Act is a form of claim suppression.
2. Claim Suppression
Section 73 of the Act prohibits any activity by an employer that seeks to discourage, impede or dissuade a worker from filing a claim with the Board.
The worker survey indicated that 4.1% of the injured workers claimed their employer pressured or threatened them not to apply. Another 7.8% of the workers said they would get into trouble if they applied for compensation. The employer survey indicates that of the 107 employers who had a sick leave or medical benefits plan, 1 out of every 5 employers (21.5%) said they allowed their workers to access benefits through these plans instead of claiming WCB benefits.
Petrie concludes:
The findings in each of these surveys reinforce the reliability and validity of each survey. These findings also indicate that there is a culture of claim suppression in many BC workplaces.
Petrie also sought enforcement data on section 73 of the Act from the Board’s FIPP office. Between 2018 and 2021 the Board conducted an average of 250 investigations per year under section 73 of the Act. These 997 investigations resulted in only 4 penalties totalling $19,995.49 over the 4 year period. Petrie observed:
The WCB data indicate the enforcement activity for s. 73 is not sufficient to provide a deterrent for employers who engage in claim suppression activities.
3. Enforcement Recommendations
Petrie also makes recommendations to address the Board’s lack of enforcement of both its claim reporting requirement and the claim suppression prohibition. The Petrie recommendations include:
- That the Board initiate an education campaign for employers and workers around the issue of claims suppression as outlined in the 2019 Patterson New Directions Review to the Minister of Labour.
- That the Board develop a claim suppression audit tool to be applied where there is evidence of possible claim suppression in a workplace to determine whether violations have occurred and whether penalty consideration is warranted.
- That the Board establish a special Claim Suppression Unit to enforce the provisions of the Act that prohibit claim suppression.
4. Recommendations re Experience Rating Practices
The Board collects assessments to cover the costs of all claims accepted by the Board. Employers in each industry classification pay a base assessment rate calculated on the average cost of claims in their industry classification. Employers with higher injury costs pay a surcharge and employers with lower injury costs receive a rebate. In theory, experience rating was intended to reward employers who maintain safer workplaces with lower premiums while those with more workplace accidents and injuries because of inadequate safety programs would be penalized with higher premiums.
In practice, experience rating more often rewards employers who engage in claim suppression activities by artificially and illegally reducing their experience rating costs at the expense of employers who meet their reporting responsibilities under the Act. Petrie acknowledges that many BC employers meet their reporting responsibilities and may provide light duty employment that is safe, productive and will not harm or delay the workers recovery. However, too many employers fail to report workplace injuries or misrepresent time loss injuries as no-time loss claims in order to illegally cut costs on their experience rating.
Petrie notes:
If claim suppression is the elephant in some BC workplaces, experience rating is the food that sustains the elephant…. This system induced inequity is contrary to the principle of employer equity based in the historic compromise and established in the Workers Compensation Act.
To address this inequity Petrie recommends that the Board:
- initiate an independent review of the WCB’s experience rating system to determine whether and to what extent this system provides an incentive for claim suppression and promotes inequity among employers; and
- consider an amendment to the experience rating policy to charge the first two weeks of any time-loss claim to the industry rate group to be funded collectively by that rate group rather than individually by each employer.
Petrie notes that the two-week period following an injury is critical in establishing a safe and productive light duty opportunity for the injured worker and securing the worker’s continued attachment to his or her employment. He adds that:
Collectively covering the first two weeks of wage loss for any claim would also reduce the current incentive to not report injuries or to misrepresent time loss injuries as no-time-loss claims under the current experience rating plan.
Conclusion:
Petrie’s Addendum was submitted to the Board of Directors and to the Ministry of Labour on March 9, 2022. I support all of its 13 recommendations.
In New Directions: Report of the WCB Review 2019, I recommended that the Workers Compensation Act be amended to provide injured workers with protection from retaliation when they file a compensation claim [Recommendation #43]. The failure of the Act to offer protection to workers from the most overt type of claim suppression is simply wrong.
But as the Petrie Addendum shows, current Board policies and practices are also deeply implicated in the practice of claim suppression. There is virtually no enforcement of the current protections and experience-rating policies effectively reward suppression misconduct. There is an absence of any commitment to address the “Elephant in the Room.”
If the principles of worker safety and the Historic Compromise are to be respected, Petrie’s reasonable recommendations should be implemented without delay.
Originally published March 25, 2022