WSIB Claim Suppression Final Report
Please find below the WSIB final report on its employer claim suppression study that was conducted independently by Prism Economics and Analysis, at the request of the WSIB, after the WSIB Funding Review identified claim suppression as an issue based on anecdotal evidence.
Claim suppression is defined as
Claim suppression refers to actions taken by an employer to induce a worker not to report an injury or illness or to under-report its severity and the duration of any lost working time or earnings. Claim suppression is always associated with actual (or intended) employer under-reporting and with worker under-claiming. However, not all under-reporting by employers or under-claiming by workers involves claim suppression. [page 109]
Here are the specific findings in the Report.
1. The most important conclusion to be drawn from the research undertaken in this project is that claim suppression appears to be a real problem. Claim suppression does not appear to be restricted to a small number of anecdotal cases. This conclusion is based on: (1) findings from a review of empirical research literature, (2) an analysis of 100 randomly selected WSIB enforcement files, (3) an analysis of the incidence of risk flags in 2,707 randomly selected no lost time claims (pre-screened for more severe injuries), and (4) an analysis of the incidence of risk flags in 3,340 abandoned lost-time claims.
2. We cannot infer the motivation for claim suppression from the documentation in the enforcement files or the claims files. However, it may be significant that of the 100 enforcement files that were examined, 49 involved non-registration with the WSIB. General non-compliance was clearly as important, or more important, than any single motivation, such as gaming the experience rating system, fear of inspection or concern for reputation. No other jurisdiction, as yet, has explored whether there is a link between experience rating and claim suppression.
3. Based on the analysis of no-lost-time (NLT) files, there are credible flags that suggest a risk of misrepresentation in the 5-10% range. The risk flags may suggest control procedures that the WSIB could implement as part of its overall strategy to ensure that workers receive the benefits which are promised by the Workplace Safety and Insurance Act.
4. The most common form of employer inducement appears to be wage continuation. For short-term absences from work (one week or less), this may raise a policy issue. Many of the potential misrepresentations identified in the analysis of NLT files involved only a few days of lost time. Some jurisdictions in Canada allow or expect an employer to maintain wages for the initial few days of work absence. In the U.S., compensation benefits often begin after 7 days absence from work. This could suggest that the WSIB may wish to review whether benefits should commence later than the first day after the incident and whether employers should be liable for wage continuation prior to the commencement of benefits.
5. There were troubling findings in the abandoned lost-time (ALT) claims that suggest a risk of claim suppression. Roughly one abandoned claim in twenty (5.2%) involved more than 14 calendar days of lost time. These files excluded claims that were withdrawn or rejected because the claimant was pursuing benefits under a third party insurance policy or another benefits regime. In itself, this finding of significant non-compensated lost time does not prove claim suppression. However, the finding may suggest that there are suppressed claims ‘hiding’ among the abandoned lost-time claims. Again, the risk flags may suggest control procedures that would reduce the likelihood of a worker losing benefits to which he or she may be entitled.
6. More than 90% of the workers in the flagged NLT and ALT files were in non-supervisory, ‘blue collar’ occupations. Construction and food services are disproportionately represented in the enforcement files. This could suggest that workers in non-supervisory, ‘blue collar’ occupations and in construction and food services are at greater risk of losing benefits to which they are entitled as a result of claim suppression.
7. In approximately half of the enforcement files examined, there was evidence of employer behaviour that was intended to induce workers not to report a work-related injury or illness to the WSIB. In about a fifth of the files with evidence of inducement, overt threats or sanctions were documented. However, in more than three-quarters of the files, the inducement did not involve documented threats or sanctions. In those files, inducement took the form of appeals to loyalty, shared involvement in income tax evasion (remuneration in cash), continuation of wages in lieu of WSIB benefits and misinformation as to eligibility for WSIB benefits. There were also instances of peer pressure not to report an injury or illness, sometimes motivated by the potential loss of a group based incentive to remain accident free.
8. Ontario is unique in enforcing employers’ statutory obligations through prosecutions. Other jurisdictions rely entirely, or almost entirely, on administrative penalties, which also typically involve lower financial penalties. The statutes in some jurisdictions explicitly prohibit employers from discouraging workers’ claims, although there is no evidence of any prosecution activity under these provisions. Nor does the current Ontario statute appear to be deficient in providing a legal basis for prosecuting employers who suppress claims. Potentially of interest to the WSIB is the administrative system in Newfoundland and Labrador. The compensation system in Newfoundland and Labrador appears to have designed a remuneration scale for medical practitioner reports such that these reports are typically received before employer or work reports. The fact that medical reports are almost certain to be submitted promptly may be a deterrent to claim suppression.
It will be interesting to see how the WSIB decides to make administrative changes suggested by the Report.