The provincial government has, through Bill 49, Workers Compensation Amendment Act, 2002, introduced a series of changes to the British Columbia Workers’ Compensation Act which will have a significant impact on the operation of the Workers’ Compensation regime and the provision of benefits under the Act. The following represent the most important amendments to the Workers’ Compensation Act.
Mental Stress Claims
Presently, claims have been allowed both for stress arising from a traumatic event and so-called “chronic stress” which arises over time.
The amendments provide that WCB will cover a stress-related claim if:
- the stress results from an acute reaction to a traumatic event;
- the condition is diagnosed by a physician as a recognized medical or physical disorder; and
- is not in response to a decision by an employer relating to the worker’s employment (i.e. discipline against the worker)
Claims for “chronic stress” are therefore eliminated.
Wage Replacement Benefits
There are four major changes to the provision of wage replacement benefits:
- Tax-free wage replacement benefits will be paid at the rate of 90% of net average earnings. Net average earnings do not include allowable deductions, including EI, income tax and CPP deductions. Currently, workers receive 75% of gross average earnings.
- Wage loss benefits will be adjusted for inflation annually, at the rate of inflation minus 1%, capped at 4% in a year. Presently, full cost of living adjustments are made twice per year.
- Workers who receive Canada Pension Plan (“CPP”) disability benefits will have their WCB benefits cut by 50% of the value of their CPP benefits. At present, workers receive full entitlement to both CPP and WCB benefits.
- Compensation is no longer paid to a worker for life, but generally will end at age 65, or if the worker would have retired after age 65, the date the WCB determines the workers would have retired. A new retirement benefit scheme will be introduced whereby a worker, at age 65, will receive a lump sum payment based on 5% of the monthly benefits received, plus interest. The worker also has the option of having 1% to 5% of each monthly benefit set aside to supplement the lump sum payment.
Structure of the WCB
Currently, the WCB is overseen by a Board of Governors comprised of 13 members. This will be changed to a Board of Directors comprised of 7 voting directors appointed as follows:
- one director representing workers;
- one director representing employers;
- two directors representing “the public interest”;
- one additional director representing “the public interest” who is Chair;
- one director who is a professional providing health care or rehabilitation services to people with disabilities; and
- one director who is an actuary.
Additionally, the President of the WCB serves as a non-voting director as does the Chief Appeal Commissioner.
The Board of Directors must provide the Minister with an annual service plan which contains a fiscal forecast and identifies specific objectives for that fiscal year.
A worker must cooperate with the Board and provide the Board with the “information necessary” to administer the claim. If the information is not provided, the Board may suspend payments of compensation to the worker.
The Minister has indicated that further legislation will be introduced to address the WCB appeal process.
Service delivery issues, identified in the Hunt Report, will be forwarded to the new Board of Directors for action.
Additional consultation will be sought on matters such as chronic pain, survivors benefits, occupational health and safety and occupational disease compensation before any legislative changes are made.