Bosses given ACC safety incentive

Employers are being offered a carrot and stick to improve workplace safety under a Government scheme which gives discounts and penalties of up to 50 per cent on their ACC levies.

But the Government acknowledged Opposition concerns that the proposal carries the risk of bosses pressuring workers not to report injuries.

ACC Minister Nick Smith yesterday said the Government planned to apply "experience rating" - essentially a no- or low-claims discount on employers' ACC levies - from April next year.

On the other side of the ledger, employers with poor safety records will pay higher levies.

The two-tier system will see larger employers receive up to a 50 per cent discount or a 50 per cent penalty according to their record over the preceding three years. Smaller employers including farmers will receive a 10 per cent discount or a 10 per cent increase on their levies depending on their record of employee injuries.

Smith expected about 220,000 small businesses would receive the discount and about 1000 would wear the penalty.

Given the work account is entirely funded by employer contributions, Smith said the changes were not expected to cost ACC extra.

The scheme would provide employers with a financial incentive to improve workplace safety and Smith hoped they would access ACC's programmes to do that. The resulting reduction in accident rates, as much as 10 per cent according to overseas experience, could result in lower levies, he said.

The proposal was welcomed by Business NZ and Federated Farmers. However, while Labour's ACC spokesman, David Parker, said it seemed appropriate to reward employers who acted to prevent workplace accidents, some might not report accidents in order to protect their discounted levies.

"It is also a possibility that some employers will encourage employees hurt in workplace accidents to report their injuries as being non-workplace."

Greens leader Russel Norman said it would not work for the same reasons.

Smith acknowledged those concerns but did not believe they were valid.

" I accept you might be able to fudge whether the sprained ankle was at work or tennis, it's a lot more difficult to fudge where there was a serious accident."

EXPERIENCE RATING

* Employers paying more than $10,000 in ACC levies annually will receive up to a 50 per cent discount or penalty according to their safety record over the preceding three years. The actual rate of discount or penalty will depend on how their safety record compares with other businesses in their sector.

* Smaller employers including farmers will receive a 10 per cent discount if none of their employees has been paid income compensation for a week or more off work over the past three years. Those with more than four claims of a week or more of income compensation will pay 10 per cent more.