The Government has recently announced that experience rating for employers will be re-introduced from April 2011. Put simply, this will give employers with low annual claims a discount on their annual ACC levy, while employers with an unusually high number of claims will face an increased levy.
Experience rating was last used in the 1990s, when it was introduced by the then National-led Government. It was scrapped by the incoming Labour-led government in 2000.
Experience rating has long been controversial. Its supporters claim it gives employers a strong financial incentive to focus on injury prevention, and on rapid rehabilitation and return to work of injured staff.
Its detractors say its impact on injury rates is not proven, and that some employers will seek to suppress ACC claims from their injured staff, or claim the injury occurred outside work, in order to preserve their low claims status.
The detractors have Sir Owen Woodhouse on their side. The lead author of the 1967 report upon which ACC was based, he and his two co-authors comprehensively rejected experience rating.
Safeguard magazine runs New Zealand’s only active online forum on workplace health and safety, where this topic was discussed recently. The initial posting summarises why Woodhouse rejected experience rating. Forum members respond with argument for and against.
This argument will run and run. Follow the debate!
(The link will take you to the forum’s discussion on this topic. By all means join the forum and the conversation – it’s free.)