Jackson And Associates
Current Trends

EI Commission Posts New Rates for 2014

The Employment Insurance Commission says the maximum insurable earnings allowed for those collecting the EI benefit will increase to $48,600, up from $47,400 in 2013. They also will freeze the Employment Insurance premium rate at the 2013 level for the next three years.

There will also be premium reductions for those employers who have registered their Short Term Disability plans under the Premium Reduction Program. Registered employers are to be notified individually as premium reductions may vary.

Cost Trends in Healthcare

Healthcare expenses in Canada are continuing to rise but at a slower pace, according to a report from the Canadian Institute for Health Information (CIHI).

Health spending is expected to rise by 2.6% in 2013 which is less than the half the average growth of 7% per year experienced between 2000 and 2010. Spending on drugs is expected to increase by 2.4% over 2012 which is less than historical trends. This is due to a decline in the number of new drugs coming on to the market and the impact of a number of generic replacements for brand name drugs being available due to patent expirations.

These trends are important factors when reviewing your annual benefit renewal and projected costs for the upcoming year.

CRA changes Tax Folios for Medical Expenses

The Canada Revenue Agency (CRA) has issued new income tax folios to replace the former interpretation bulletins.

The former Interpretation Bulletin IT-519R2, Medical Expense and Disability Tax Credits and Attendant Care Expense Deduction, is replaced by the following folios:

  • S1-F1-C1 : Medical Expense Tax Credit
  • S1-F1-C2 : Disability Tax Credit
  • S1-F1-C3 : Disability Support Deductions

For additional information, please refer www.cra-arc.gc.ca/tx/tchncl/.

Workplace Absenteeism Increasing

A Conference Board of Canada survey reveals that data gathered for 2011 indicates the average absenteeism rate in the country was 9.3 days per full-time employee (almost two full work weeks). Public sector absenteeism at 12.9 days exceeded that for the private sector (8.2 days). The rate for unionized workers was 13.2 days compared with 7.5 days for non-unionized employees.

Companies estimate that the direct cost of absenteeism averaged 2.4% of gross annual payroll and this figure does not include indirect costs such as replacement expenses for absent workers, administrative costs and the negative effects on other employees and customers.

The good news is that with strategic planning and implementation, these trends can be managed and ultimately reduced. This is not exclusively a problem for the human resource area however and will require the support of senior management to allocate resources, set objectives and implement the solution.

Before an attendance management strategy can be developed, each organization needs to understand what are the drivers within their operation and this requires an audit of absenteeism, including:

  • By region: are some regions more susceptible ? Why ?
  • By location within a region
  • Existing policies and procedures: are there written policies for attendance management, disability management, sick/leave days ? Are they applied consistently at all locations and by all managers ?
  • Scheduling: do absences occur at certain times of the day, week, year ?

The key is to think broadly and to dig deeply into every aspect of your organization’s workplace absenteeism. Once the data has been obtained, then a program can be tailored specifically for your operation.

New Employer Duties in BC for Bullying & Harassment

Effective November 1, 2013, WorkSafe BC has developed new policies regarding an employer’s duties for Workplace Bullying and Harassment.

There is an online “tool kit” to help employers with their legal duties under these new guidelines. These can be found at www.worksafebc.com under Safety at Work and sub-heading Topics.

If you have any questions, please do contact them at policy@worksafebc.com

The Ability to Change Retiree Benefit Provisions

A recent Ontario Superior Court ruling stated that retiree benefits may be changed even after an employee retires (O'Neill v. General Motors of Canada Limited, 2013 ONSC 4654). This ruling states an employee’s right to retiree benefits does not irrevocably vest in the employee upon retirement. Nor does the right to such benefits vest in an active employee upon the employee satisfying the age and service criteria that may be established by the employer for entitlement to the benefits.

This only applies if the benefit policies have the appropriate language to enable the employer to reserve the right to amend or delete such provisions in future. Documentation needs to be provided to each employee clearly stating that:

  • Benefits were not prefunded, and
  • Benefits are not guaranteed and could be reduced

This documentation should state that these changes can occur both during their active employment and also after retirement