Oakland, CA – The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has released its new report, Does Experience Rating Help Keep Workers Safe? This study is based on over a decade of employers’ loss and payroll experience to evaluate the independent impacts of experience rating on work-related injuries.
In California, the primary statutory goal of experience rating is to provide financial incentives for employers to promote a safe workplace. While most employers pay close attention to experience rating, there is limited research on its effectiveness as a safety incentive.
Highlights of the report include:
- Qualification for experience rating led to a larger decline (–17 percent) in claim frequency for newly rated employers relative to non-rated employers of similar size and industry during the analysis period, three years after the first experience modification (X-Mod).
- For experience rated employers, an increase in X-Mod from credit (less than 100 percent) to debit (greater than 100 percent) is associated with a larger decline in the likelihood (–5 percent by the third year) of having any claims.
- The construction, manufacturing and hospitality industries have a relatively high share of employers eligible for X-Mods. In all three industries, employers that had an increase in their X-Mods from credit to debit had a larger decrease in future claim frequency than other experience rated employers.
- While a credit to debit X-Mod increase is associated with a larger decline in claim frequency for employers of all sizes, medium-sized employers appear to have the largest relative decline (–8 percent) in claim frequency.
The full report is available in the Research section of the WCIRB website and here: WCIRB CA: Does Experience Rating Help Keep Workers Safe? (PDF)
WCIRB Research Forum Webinar
The WCIRB also hosted a free webinar to discuss the new report. Watch it here: WCIRB Webinar: Does Experience Rating Help Keep Workers Safe? Speakers summarized the results of their research assessing the impacts of experience rating on claim frequency.
Source: WCIRB CA