Federation of Labour says it’s time to raise benefits for injured workers, not just rebates for employers
The Newfoundland and Labrador Federation of Labour (NLFL) is calling on the province to increase the income replacement benefits for injured workers, following the release of WorkplaceNL’s 2025 Annual Report showing the Injury Fund is now funded at 139.5 per cent.
“WorkplaceNL is not just meeting its funding target, it is now well past it,” said NLFL President Jessica McCormick. “The fund’s own target range is 100 to 115 per cent; we are now sitting at nearly 140 per cent. There is no financial argument left for denying injured workers a fair income replacement rate. The only question is whether government has the will to act.”
Injured workers in this province currently receive workers’ compensation benefits equal to 85 per cent of net earnings – one of the lowest rates in the country. That financial strain does more than create hardship – it can actively interfere with recovery. Workers under financial pressure may return to work before they have healed, risking re-injury or permanent disability. The stress of financial insecurity itself works against physical and mental recovery.
“Adequate income replacement isn’t a favour to injured workers, it’s what makes recovery possible,” said McCormick. “When workers are forced to choose between paying their bills and taking the time they need to heal properly, everyone loses: the worker, their family, their employer, and the compensation system itself, which ends up paying for re-injuries and longer, more complicated claims.”
The last statutory review of the workers’ compensation system explicitly recommended that there be no further discounts to employer assessment rates until the income replacement rate for injured workers is increased. Despite that recommendation, employers have continued to receive rebates while injured workers have been left with a replacement rate that has not kept pace with what workers actually need to get by during recovery. McCormick says the newly released 139.5 per cent funded position makes that imbalance even harder to justify.
To restore fairness and fulfill the system’s core mission, the Newfoundland and Labrador Federation of Labour is reiterating its call for government to make the following changes:
- Increase the income replacement rate to 90% of gross earnings for all injured workers. Moving from the current 85% of net to 90% of gross would provide genuine income security, reducing the devastating gap between pre-injury earnings and compensation, and allowing workers to focus on recovery instead of financial survival.
- Remove the arbitrary earnings ceiling cap on workers’ compensation benefits. The current legislation caps compensable earnings at just over $80,000, meaning a worker earning $120,000 suffers the same maximum benefit as someone earning $80,000, despite facing a far larger income loss. This ceiling creates a two-tier system that punishes higher-paid workers for a workplace injury.
“The principle behind workers’ compensation is that injured workers should be made whole, to the greatest extent possible so they can focus on recovery,” said McCormick. “With the fund this strong, government has both the capacity and the responsibility to improve the system for injured workers who are struggling with the rising cost of living.”
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