Impact of workplace fatalities for businesses in the ER Programme
In the Experience Rating Programme, there’s currently no differentiation between a fatal injury and any other ACC claim over $500 that doesn’t put you off work. This means, for example, that a work-related fatality has the same impact on a business’s experience rating as a sprained ankle requiring $500 of medical treatment.
|We propose to increase the impact a fatal claim has on an employer’s experience rating. This change would result in a levy increase for employers who have had a fatal claim recently.|
We considered two approaches to increase the impact of a workplace fatality in the Experience Rating Programme.
Treat each fatal injury the same as a severe injury requiring a year or more away from work (the maximum impact one injury can have in the Experience Rating Programme).
The impact of this approach would be significant for smaller businesses with some facing a levy increase as high as 80% if a fatal injury occurred in their workplace. However, for larger businesses, a single claim – be it a fatal claim or another single injury – would not significantly adjust their overall claims history, so the impact on the experience rating assessment would be much less.
Option 2 (proposed)
Separate fatal claims from medical claims in the experience rating calculation. A fatal claim within the last two experience rating years would trigger a final adjustment to that employer’s levy of a 20% increase in the first year and 10% increase in the second year.
The impact of this approach would always be proportional to the size of the business’ normal levy. We believe this approach reflects the public concern about loss of life in our workplaces and provides a visible signal to employers, regardless of their size, about the responsibilities they have to take all practicable steps to avoid loss of life.
How it would work
We propose that from 1 April 2023, fatal claims would be separated from medical claims in the experience rating calculation. A fatal claim within the last two experience rating years would trigger a final adjustment to that employer’s levy.
The employer’s final experience rating would be revised by one or two bands (i.e. a 10% or 20% levy increase).
- If the date of a personal injury resulting in a death was in the most recent year of a business’s claims history, then a levy increase of 20% would be added to the employer’s work levy.
- If the date of a personal injury resulting in a death was in the year before the most recent year of a business’s claims history, then a levy increase of 10% would be added to the employer’s work levy.
What it would mean for businesses
We anticipate levy increases resulting from fatal claims would impact only a handful of employers in the Experience Rating Programme each year (on average, ten businesses in the programme have a fatal claim in a year).
The use of standard adjustments (10% or 20%) means the financial impact of a fatal injury is proportional to the size of the levy. A larger business would pay a larger dollar amount.
What you told us in 2018
Some submitters supported this proposal when we first consulted on it in 2018. However, other businesses raised concerns that:
- a fatality adjustment would be unfair
- businesses could also be liable for a financial penalty from WorkSafe NZ.
A focus on critical risks takes a whole-of-system response. We all have a role to play. Just as employers have a responsibility to ensure their workers go home safely at the end of each workday, ACC and WorkSafe have distinct but complementary roles for harm prevention.