Common Errors and Deficiencies with the OCF-2

An Employer’s Confirmation Form (OCF-2) is, as the name states, filled out by the employer to confirm the insured’s work history. It provides employment dates, basic income details, and information on the potential availability of other income replacement assistance (collaterals). All of this information would be used in the calculation of the Income Replacement Benefit (IRB).

It is, however, grossly deficient in outlining the information required from an employer in light of arbitration decisions over the years. Part of this is likely due to the OCF-2 having not been updated since 2004.

Deficiencies with the Form

Right off the bat, we can see this form presents a few issues as it pertains to relying on this information to calculate an IRB.

All of the information requested on the OCF-2 is relevant in the determination of how much an insured will receive. Any missing or misinformation on the form, can directly affect the payment amount. And yet, while the form would appear quite comprehensive, the deficiencies quickly become apparent when compared to decisions such as Pafco and Howden (FSCO Appeal P00-00028).

As Pafco and Howden shows us, there is a substantial amount of relevant information that needs to be collected to determine gross income from employment. These include employer’s contributions towards: life insurance premiums, weekly indemnity insurance premiums, a Pension Plan, pay equity adjustment, and even uniform allowance. None of these are explicitly requested on an OCF-2.

Most of the above are non-taxable employer paid benefits, and as such, do not show up in an insured’s gross earnings. While some pay statements may display them separately, this is not always the case. In regard to the OCF-2, it would be a reach to argue the form provides the necessary guidance to an employer to include items such as those listed above. And while a space exists for Other Monetary Compensation, most of the items outlined above would not be considered as such.

Other Monetary Compensation would usually be considered by employers to include vacation, bonuses, or other irregular remuneration. But from our experience this is still not always the case. And for adjusters relying on the OCF-2 as the basis of their calculation, this can lead to significantly understated IRBs.

For details on how vacation, bonuses and other irregular remuneration should be considered, and further highlighting the impact of the OCF-2 in regard to these items, we suggest our post – Bonuses and Commissions – Calculating Gross Income for IRBs

User Error

Most obviously there exists the risk that the person completing the form does not have the required knowledge upon which to assess what is needed or really being asked of them.

A very common error is an employer providing net rather than gross income. Pay statements will usually show both, the pre- (gross) and post-deduction (net) amounts. It is then common that an employer incorrectly interprets the OCF-2 as requesting the amount received by the insured (ie. the cheque amount), as opposed to the amount earned by the insured. This discrepancy can obviously have a significant impact on the IRB, and will likely understate the amount payable.

Another error is providing details for incorrect periods, such as the last four weekly pay periods as opposed to the actual last four weeks. Or worse still, is providing the last four bi-weekly pay periods, rather than four weeks. All of these we see on a very regular basis, and all of them have the capability to significantly impact the IRB payable, both positively and negatively.

There is a solution

Never fear, ADS is here! By asking the right questions — by knowing which documentation to request — you can enhance the OCF-2.

Head on over to our blog post on OCF-2 support, where we will fill you in on what supporting documentation to ask for, what to look out for, and what questions to ask. We even have a form you can use to send with the OCF-2 to provide employers with the guidance they need. This can be customized for your firm specifically.

And as always, we are available to talk at 1-800-380-7908 ext. ASK (275).

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