Auditor general raises questions over inequities in workers’ compensation models in New Brunswick

A new report from New Brunswick’s auditor general has revealed inconsistencies in the workers’ compensation system for government employees, with no apparent business rationale.

Auditor general Paul Martin tabled his report in the legislative assembly on Dec. 14. The audit reported that the Department of Finance and Treasury Board has established different compensation models for various employee groups, with no documented business case for having done so.

“We could find no documented evidence that the department had analyzed the different payment models in terms of benefits to employees, costs to government or outcomes,” said Martin.

Injured workers within the health-care sector are compensated as per the Workers’ Compensation Act, at 85 per cent of net loss of earnings. Government pension and vacation benefits do not accrue, and payments are subject to maximum insurable earnings.

The department has established a policy, and clauses within various collective bargaining agreements, to provide injured workers within government departments and school districts with 100 per cent salary continuance, including pension and vacation benefits.

Martin pointed out that the salary continuance model provides benefits of just over an additional $1,000 per worker per year when compared to the 85 per cent of net-loss-of-pay methodology. However, additional costs to the government for salary continuance are over $1.8 million per year.

These additional costs, according to the auditor general’s report, are, in part, due to personal income taxes, Canada Pension Plan and Employment Insurance.

The audit concluded that regional health authority employees are compensated at lower levels than government department and school district employees. Although compensation structures appear to align with legislation, policy and collective bargaining agreements, there is no documented business case to support treating employees differently.

“The Department of Finance and Treasury Board should ensure that variations among workers’ compensation payments methods are documented, evidence-based and rationalized,” it said.