Reducing the Impact of Work Injuries on Your Business
NSW workers’ compensation premiums are set to increase by an average of 8% over the next three years. Therefore, it is crucial for employers to act promptly to ensure their businesses have the right processes and practices in place to minimize the impact of work injuries on premiums. In this article, we explain how workers’ compensation premiums are calculated and offer our top six recommendations for reducing the impact of work injuries on your business.
Calculating Your Premium
To calculate your workers’ compensation premium, multiply your wages by your industry code, known as the ‘base tariff’. If your base tariff exceeds $30,000 per annum, you will also be subject to an experience rating. This rating is based on your claim costs rate over the past three years compared to scheme claim cost rates. Employers with poorer claims experience will be penalized, while those with better performance will receive discounts. Therefore, employers should take proactive steps to improve claims performance.
Factors Contributing to Premium Increases
Two key factors contribute to workers compensation premium increases: the number of claims and the cost of each claim. The cost of each claim is mainly impacted by wages paid to the worker while off work. Therefore, the quicker a person returns to work, the lower the cost of wages paid and the lesser the impact on the overall claim cost.
Incentives for Employers
Several incentives are available to employers for premium discounts, reflecting low claim numbers and good claims management. These include the Return to Work Incentive, Safe Employer Reward, Performance Discount, and Notification of Injury within 48 hours with nil excess. We recommend employers take advantage of these incentives through strong practices.
Our Top Six Recommendations
- Prevention: Focus on preventing injuries from happening in the first place.
- Review Injury Management Procedures: Set up the right processes before an injury occurs to ensure early action and avoid costly delays.
- Consider Engaging an Outsourced Return-to-Work Coordinator: If you lack the budget or expertise to manage claims well, consider engaging an outsourced coordinator.
- Nominate a Preferred Workplace Rehabilitation Provider: Engage a provider to help injured workers return to work safely and quickly.
- Invest in Mental Health Initiatives: Assess your workplace’s mental health and provide training and education for workers.
- Act Now: Take proactive steps to control your workers’ compensation premium and invest in these strategies now.
Our staff are available to assist you with implementing these strategies in your workplace. By acting now, you will ensure your business is prepared for any future challenges and unnecessary premium escalations.
For any queries, please contact Work Options at 02 9957 1300 or referrals@workoptions.com.au, or nominate Work Options as your Preferred Workplace Rehabilitation Provider here.