Around 63 per cent of all medium and large employers across South Australia, including those in the construction industry, will be rewarded with lower WorkCover insurance premiums under a new system designed to reward employers with a positive claims record.
WorkCover SA says the idea behind the Experience Rating System, which came into effect on 1 July, is to allow companies to influence their premium be implementing effective workplace safety measures and practices.
“The new system introduces financial incentives for employers to prevent injuries in the workplace and support workers that are injured to remain at or return to work, therefore reducing claims costs,” says WorkCoverSA Chief Executive Officer Rob Thomson.
Under the new system, which will apply to employers with a base premium of $20,000 or more and/or who pay a total of $300,000 or more in remuneration to their workers, employers’ premiums are calculated using a combination of their size, the level of their industry risk and their individual claims experience.
Thompson says the new system is aimed at large employers because they make up less than 10 per cent of overall employers registered with WorkCover in the state yet account for three quarters of annual claim costs.
The new system with not apply to small employers, who on average lodge a claim on average just once every 14 years.
Thomson says experience-rated employers with a claims record that is better than their industry will see a decrease in their premium when compared to being industry-rated. Employers with higher claims performance than their industry will pay more.
He says WorkCover’s modelling indicates that around 63 per cent of employers who will be experience-rated will receive a reduction in their premium when compared to what they would pay based only on their industry rate.
Thompson says the development of the system was guided by input from employers and employer groups as well as the experience of other systems from across the country.
In May, WorkCover SA held briefings with nearly 500 employers across the state as part of an information roadshow to prepare companies for the new system’s implementation.