1. CIA Annual Meeting 2006 Bob Thomas, Manager Regulatory Services

2. Agenda WSIB Compliance History Regulatory Services Overview Non-Compliance Impacts New Compliance Model WSI Act Offences Penalties Impacts and Outcomes of New Compliance Model Case Studies

3. Identification and pursuit of cases of non-compliance and fraud “Zero Tolerance” to Fraud New legislative authority (Bill 15) Special Investigations Branch (SIB) expansion Continued enhancement of legislation; major Offences and Penalties section WSIB Compliance History Extent of non-compliance/fraud not well understood Impacts were clear including: injured workers at risk (non reporting and under reporting of accidents) compliant employers at a competitive disadvantage (non reporting and under reporting of premiums) premium rates reflecting claims and health care costs that are not legitimate (worker and health care provider fraud) Late 1996 and early 1997

4. Regulatory Services Investigations –POA (WSI Act) and Criminal Surveillance –Use PI firms TIPS Action Line –1-888-SILEADS or 1(888)745-3237 Analysis and Education Specialized Adjudication Prosecutions –3 internal Prosecutors –Crown (Criminal) Special Compliance Projects

5. Impact of Employer Non-Compliance Accident costs not allocated to employer Employer avoids impact of experience rating Negative impact on WSIB unfunded liability Employer gains unfair competitive advantage

6. Impact of Worker Non-Compliance Inappropriate payment of benefits Incorrect costs allocated to Employer Misdirected needed resources (e.g. medical)

7. New Compliance Model More broadly based approach to addressing compliance issues throughout the system. Incorporates a continuum of activities including: –clarifying the rules where necessary –seeking voluntary compliance through education and cooperation –applying appropriate administrative penalties –pursuing investigation and prosecution when appropriate

8. Outcomes of the New Compliance Model Compliance by workplace parties with the spirit of compensation legislation Financial security of compensation system Improved health outcomes for injured workers Implementation of legitimate safety programs Reduction in accidents Improvement in economic well-being of workplace parties Increased confidence in compensation system

9. WSI Act Offences Strict Liability Offence qThe action or inaction itself is an offence. qRepresents non-compliance with a legislated obligation. qProof of the offence is generally straightforward and convictions result in small fines. qExample: fail to register within 10 days Specific Intent Offence qRepresents an act of intentional deceit qComparable to fraud under the Criminal Code. qRequires proof beyond a reasonable doubt of an intent to mislead the WSIB. qGenerally result in higher fines and are treated more seriously by the courts than strict liability offences. qExample: knowingly make a false or misleading statement about benefit entitlement

10. WSI Act Offences Cont’d Section 149 of WSIA 149 (1) knowingly make a false or misleading statement or representation to the Board in connection with any person's claim for benefits 149 (2) willfully fail to inform the Board of a material change in circumstances in connection with your entitlement to benefits

11. WSI Act Offences Cont’d 149 (3) willfully fail to inform the Board of a material change in circumstances in connection with your obligation as an employer under the Workplace Safety and Insurance Act, 1997 149 (4) knowingly make a false or misleading statement or representation to the Board to obtain payment for goods or services provided to the Board, whether or not the Board received the goods or services

12. WSI Act Offences Cont’d Section 151 Offences Section 151 (1) an employer failing to register with the Board; Section 151 (1.1) an employer makes a false statement when registering with the Board Section 151 (2) an employer failing to notify the Board that it has ceased employing; (ceased to operate)

13. WSI Act Offences Cont’d Section 152 (1) (2) an employer failing to submit a statement setting out the wages of its workers for any period required by the Board, whether monthly, quarterly or yearly. Section 152 (3) an employer failing to notify the Board of an accident to a worker within 3 days of learning of the accident, where that accident necessitates health care or a loss in wages. Section 155 (1) (2) an employer who directly or indirectly deducts wages from a worker, or requires or permits its workers to contribute toward indemnifying the employer, for or against the employers' liability under the Act.

14. WSI Act Offences Cont’d Section 157 Offence by Director, Officer If a corporation commits an offence under this Act, every director or officer of the corporation who knowingly authorized, permitted or acquiesced in the commission of the offence is guilty of an offence, whether or not the corporation has been prosecuted or convicted

15. Penalties Individual Maximum fine for each offence $25,000 Prison not exceeding 6 months - or both Corporation Maximum fine for each offence for a Company $100,000 2003 $1.725 million fines 2005 $2.268 million fines

16. New Compliance Model: Impacts and Outcomes

17. Case Studies: Employers Investigation - Company Automobile accident 5 employees died Investigation revealed extensive under reporting of payroll over a number of years Search warrant disclosed the use of a double bookkeeping system to avoid WSIB liabilities. qA plea agreement was reached with the company and endorsed by the Court. It resulted in guilty pleas to 28 charges with total fines of $1 million and a restitution order requiring the company to pay $4 million in retroactive premiums.

18. Case Studies: Workers Investigation - Worker pinned between two cows while milking variety of physicians found no organic reason for subsequent paraplegia, however wheelchair bound/unemployable psychological injury; entitlement including home modifications video surveillance: not a paraplegic, can walk, run, drive, garden etc. only used wheelchair when seeing persons at the house or WSIB no report of material change; advised condition worsening SIB investigation; many witnesses confirm not a paraplegic charged: material change / false statement qguilty plea; failing to report a material change q$10,000 fine; $ 54, 896.75 benefit overpayment