Individual Liability and Collective Liability in Workers Compensation
Hi there, I am a bit confused by those two terms, I was wondering if someone could give an explanation on these. To me, those terms intuitively, just mean either one employer shares liability of workers or a collective group of employers share the liability of workers. The battlecards state that Individual Liability is used by public agencies, that means all private agencies use collective liability?
Also, a general question for Workers Compensation. Is this a government program where employers contribute towards in order to be covered, or does the Company this up and this is what it means to be "self-funded" in the Individual Liability case?
Comments
Individual liability just means the employer is self-insured. They pay for sicknesses and accidents of their employees.
Under collective liability, to put it simply, groups of employers are divided into industry classes where they each contribute a portion of payroll (based on their rate group and previous experience) into a "pool" which is then used to pay out benefits to workers who require WC. Basically employers are insureds, the pool is an insurer and payroll contributions are premiums
Individual liability is used for public agencies or government, crown corporations and large public transportation organizations (i.e. shipping, airlines and railways) Everyone else uses collective liability so you are right there.
According to the source material, employee contributions are not allowed. Yes, it's established by legislation in each of the provinces and territories. Each employer has to participate, it is just whether they choose to self-insure or be self-funded as you mentioned by choosing individual liability or they choose to go with collective liability