Notable WSIB Policy Changes: Policy #18-02-02 – Determining Short Term Average Earnings

Nov 29, 2024

In the last year, the WSIB has made two (2) changes to the Short Term Earnings (STE) policy, both of which are important for employers to understand when they are filing their Form 7 or otherwise providing a workers’ earnings to the WSIB for the purpose of Loss of Earnings (LOE) benefit entitlement.

The STE benefit rate applies for the first twelve (12) weeks of LOE benefit payment.  Thereafter, the WSIB calculates a Long Term Earnings (LTE) benefit rate, which incorporates a full year of earnings data (with all the ups and downs in varried earnings), to determine an annualized fair rate.

The WSIB policy for STE requires the worker’s earnings in the most recent four (4) weeks prior to the date of accident.  Historically, that would be the actual days, i.e. if the injury happened on a Thursday, the data would be required from Wednesday to Wednesday for 4 weeks regardless of the pay cycle or regular work week.  The 2023 change to the WSIB policy was to require the most recent 4 weeks’ pay periods.  This aimed to simplify an employer’s reporting on the Form 7 because the necessity of splitting pay periods into actual days/week was discontinued.  However, this WSIB policy change also introduced the word ‘consecutive’ for the four weeks thereby negating the possibility that the worker would have a non-pay period within the most recent 4 weeks that would lower the weekly average (and the related LOE benefit rate).

Most recently, the WSIB changed the same policy – this time, with respect to the treatment of overtime hours/pay.  Historically, any overtime was characterized as voluntary or mandatory.  Only mandatory overtime was automatically included in the calculation of the STE LOE benefit rate, and voluntary OT only if it occured in each of the 4 weeks of earnings. Both voluntary and mandatory OT were included in the LTE LOE benefit rate calculation. Again, purportedly to simplify the process for employers, the WSIB policy has been changed to include ALL overtime, regardless of whether voluntary or mandatory. This means that employers (and the WSIB) do not have to conduct the exercise of deciding what type of overtime it is and applying different rules for STE and LTE calculations. This policy change will not affect the STE LOE rate for high wage earnings (i.e. over the annual maximum insurable earnings limit) but would otherwise increase the LOE rate payable for those that have voluntary overtime in the prior 4 week pay period.

This policy takes effect December 5, 2024, for all STE LOE decisions made on or after that date, regardless of accident date. A new Employer’s Report of Injury (Form 7) presribed form with a revised page 3 is expected to be available on the WSIB website by the implementation date.

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