Columnists Features

Workers’ Compensation assessment rates for 2017

WORKERS’ COMPENSATION CORNER with MAYBIN NKHOLOMBA
WE affirm our commitment to upholding the principles of good governance, which require among other things that we provide information to our members and the general public on important issues relating to benefit administration and compliance among other services provided by the Workers’ Compensation Fund Control Board (WCFCB).
We realise that the public and more particularly our members have a right to know how the WCFCB functions in so far as raising revenues and subsequently making pay outs or expenditures. We truly believe that WCFCB is a public fund and those entrusted to manage it must observe at all times principles of good governance in running the affairs of this institution.
As a result, we take this opportunity to share with our readers information on the assessments payable in the 2017/18 financial year by all employers amenable to the Workers’ Compensation Act No. 10 of 1999 of the Laws of Zambia.
The 2017/18 financial will commence on April 1, 2017, all employers in the public and private sectors of the economy except the Government are required under the Workers’ Compensation Act to register with the WCFCB and to make annual financial contributions otherwise known as assessments into the fund.
It is out of this fund compensation is paid to workers in the event of occupational accidents and diseases. The value propositions coming out of the compensation package include traditional monthly pension payments, economic and social rehabilitation of injured workers, free health and safety education of workers, and medical evacuations and refunds.
The WCFCB’s assessment rate setting system is based on collective liability and experience rating. The premiums employers pay go into the accident fund, which collectively, is used to pay the short term benefits especially those incidental to treatment of injuries while long term benefits are paid from a pension fund account. Employers pay premiums or assessments, based on the level of risk associated with the industry they are involved in and their own individual claim experience.
The maximum assessable income upon which assessments are calculated is K800 per month or K9,600 per annum. Any income exceeding K800 per month or K9,600 per annum is disregarded for purposes of calculating assessments payable by employers and likewise compensation payable to workers getting injured or contracting diseases.
Understandably, employers in the mining and quarrying industry pay higher assessments than flower shops due to the higher risks associated with those industries. In simple terms, employer assessment rates are calculated by factoring the employer’s own injury experience and the collective injury experience of other employers who share the same level of risk.
It is therefore highly possible that one mine house may go for many shifts without lost time injury but end up paying higher premium as a result of incidences at other mine houses. Similarly, one mine house may experience a tragedy whose cost of compensation exceeds assessments paid to WCFCB but because of pooling risks, such cost is shared with other employers.
Assessment rates are calculated by actuaries that normally examine the costs of compensation associated with particular employers over a period of time by assessing accident experience industry by industry. There are two kinds of costs; (i) direct costs composed of wage-loss, medical aid and rehabilitation expenses paid to the employer’s injured workers, and (ii) indirect costs which include the costs of running the workers compensation system that cannot be apportioned to any one claim, for example, administration.
These, along with a calculation representing the collective injury experience of employers with comparable risk, are used to determine an employer’s assessment rate.
The rates for this financial year will be published in the press in the next few days for the benefit of our esteemed clients, the employers who are amenable to the Workers’ Compensation Act. We encourage our readers and especially employers to pay particular attention to the requirements for this year, as will be published in the press, to avoid challenges, often experienced with compliance by some employers.
Some disruptive innovations will be implemented soon, to resolve ‘easy of use’ challenges with registrations, payment of assessments as well compensation within the course of this year. We do hope that employers will give maximum support to the cause of establishing a well-functioning system for the protection of workers against injuries and diseases.
On our part, we will make every effort to ensure that sufficient information is generated and availed to employers, to enable effective participation in the administration of the scheme, as we fully understand that we run this institution on behalf of our key stakeholders.
The author is Head of Communications and Customer Services at the Workers’ Compensation Fund Control Board
Email:compensation@workers.com.zm or mnkholomba@workers.com.zm; Tel: 0212621283

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