For Product A we’re proposing a Performance Rating Framework (working title). This product will more strongly link the levy you pay with your actual health and safety performance and give you a better customer experience. It also means improved outcomes and experience for your workers.
This framework will give transparent and meaningful recognition of your performance. By integrating three core components we can provide a full picture:
- Simplified base levy pricing
Simplifying the part of your levy based on your risk profile, as defined by your business activity.
- Enhanced performance rating
A rating which gives more weight to the actual and more recent health and safety performance of your business.
- Lead indicators (optional)
Recognising and rewarding your business for the other health and safety improvements you make.
We’re planning to introduce all three components of Product A in April 2020. Components two and three will not apply to self-employed.
Proposed key features
We'll calculate the base levy using your annual liable earnings and the rate that applies to your main business activity. For example, the external service, the product produced or sold, nature of work undertaken. We'll then group similar business activities together, and set a rate for that group based on their industry and activity risk.
How we're making this easier
We’ve heard from businesses that we could make this easier. To simplify base levies, we'll be creating larger, more similar risk groupings that will increase levy stability. We want to minimise the fluctuations in your base levy.
This stability is important. It supports an accurate forecast of movement of the average levy of the group. This helps businesses to understand the performance level they need to reach to reduce their levy.
To do this, we'll:
- review our Levy Risk Group (LRG) business rules to improve equality
- investigate the combination of LRGs into wider groups based only on their injury risk profile. This means we’re grouping businesses with similar levels of risk. The rate they'll pay will better reflect the rate of injury and illness
- assess if we need to split risk groups by business size to form the basis of new peer groups.
You’ve told us that the existing experience rating framework needs to change. You'd like your levy to better reflect the actual health and safety performance of your business.
To do this, we’ve looked at two different models. They'll help encourage businesses with high injury costs to reduce them and businesses with low injury costs to keep them low. With the goal to reduce the social and economic costs of work-related injuries.
Calculating your performance rating
We’ve aimed to design a simple performance rating calculation that:
- focuses on individual business performance
- is more responsive to recent experience
- allows customers to access the maximum available discounts (or loadings) for their peer group
- creates a positive reinforcement system for good health and safety behaviour
- increases visibility of poor health and safety behaviour
- helps customers to better understand the consequences of their actions. And motivate them to make improvements.
There are two ways we can achieve this:
- Model one: modify our current experience rating calculation.
- Model two: introduce a new performance rating calculation.
Download our diagram showing how the two different models for enhancing performance rating might work.
Lead indicators will help us recognise and reward your investment in certain health and safety improvements. We'll work with partners in each sector to define lead indicators.
You’ve told us that you value a way to acknowledge the proactive work you’re doing in this space. To recognise this, we’re looking at introducing status points. How many points you have enables your business to show your commitment and health and safety performance to the market. Our intention is that you could then redeem your points to access further health and safety improvements. It will be up to you whether or not your business takes part in status points.
How status point could work
- We'll work with sector partners to outline improvement activities businesses can invest in and receive points for.
- When a business confirms they’ve invested in an activity, we’ll apply the appropriate number of points to that business.
- The accumulation of points and status is then visible to the business through an online portal.
- Businesses can use their status level to signal to the market their commitment and health and safety performance.
- Businesses can redeem their points to access further health and safety improvements.
- Points and status will expire over time, encouraging businesses to keep on investing in health and safety.
This feature allows us to:
- signal to the market what the sector believes to be an effective investment
- measure the effectiveness of an activity to assess if it should still be a reward
- give a greater number of points to activities that have a higher chance of effectively reducing injuries or improving rehabilitation in the future
- create a points scale that is fair to all businesses no matter what size.
Performance rating points
We’re also considering the concept of bonus or penalty points. This will work by linking the status points with your performance rating calculation. You'd receive points based on the performance of your business. For example, if your business receives a performance rating discount of 20%, you’ll also receive 20 status points at the start of the period.
You’ve told us that being able to share your health and safety performance with others is valuable.
We're looking at how we can make your health and safety performance available through an online portal. We want to make it possible for you to track your performance rating and status points and share your results with:
- workers and potential workers
- supply partners and contractors
In the future, we'll look to expand these performance capabilities.
Service options for Product A and B
We're proposing an online portal where you can access services, information and advice to help improve your health and safety performance.
Get in touch
Contact the team if you have a question or you want to know more.
Give us your feedback
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