Victorian employers have this week started receiving their 2023/24 WorkCover Premium Notices. With the payroll premium rate increasing by 46%, most employers have seen a big jump in premiums – some by as much as 75%.
Why are WorkCover premiums increasing?
WorkCover premiums, like so many other costs of doing business, are increasing across the board. For most employers, the cost increase will be significant.
In May 2023, the Victorian State Government announced that the average payroll premium rate would increase from 1.272% in 2022/23 to 1.8% in 2023/24 (a 46% increase). However, it is important to note that the average payroll premium rate is a ‘general figure’.
While the payroll rate increases are unavoidable, it is not the only factor used to calculate your premium. Your organisation’s payroll premium rate is based on:
· Your industry – different rates apply to different industries based on risk.
· Your overall remuneration – it’s important to ensure this is up to date and accurate.
· Your claims history and return to work outcomes.
All of these factors are reported on page 3 of the WorkCover Premium Notice – and should be carefully checked not only to ensure their accuracy but also to identify any opportunities to improve performance and, in turn, future premium ratings.
3 things to check on page 3 of your Premium Notice
Annual remuneration
Industry classification
Performance rating
What can employers do to reduce the cost of WorkCover premiums?
WorkSafe Victoria tells us ‘the best way to ensure you pay the lowest premium is to operate a safe and healthy workplace to prevent injuries from incurring. However, if injury or illness does occur, focussing on achieving a prompt and sustainable return to work outcome will assist in keeping premiums down.’
Improve claims and injury management processes
How your business manages WorkCover claims, injuries and return to work programs has a significant impact on your premium. For larger businesses, each $1 in claim costs can amount to a premium increase of as much as $4 for a number of years.
The complexity that surrounds claims, injury and return to work program management often means that injuries cost businesses far more than they need to and take up valuable time and resources.
Claims and injury management is a highly specialised area and requires an intimate understanding of the different schemes. For larger businesses managing multiple claims each year, improving the effectiveness of claim management and outcomes can deliver significant savings on a number of fronts.
However, hiring an internal Workers Compensation specialist only makes sense for very large businesses with a high volume of claims, which means that the responsibility typically falls on HR, Accounts or Payroll staff, with minimal or no training in Workers Compensation regulations and limited time to deal with the complexities of claims management. For this reason, many organisations achieve improved outcomes by outsourcing claims and injury management to a specialist provider.
Reduce workplace injuries through improved safety management systems and culture
Not surprisingly, organisations that prioritise safety, regularly review and audit safety management systems and have a positive safety culture that stems from the top down typically have lower incident rates, which in turn results in fewer claims.
By investing in an independent review of your organisation’s safety management systems, you can put measures in place to ensure that:
• Your organisation complies with all relevant safety legislation and requirements.
• Directors and officers are protected from criminal prosecution.
• Risks to the safety and wellbeing of employees are effectively and appropriately managed.
Pay early and pay in full
Discounts are provided to employers who pay their premiums early. If your premium is paid in full by:
• 14 August 2023 you will receive a 5% discount.
• 1 October 2023 will receive a 3% discount.
You also have the option to pay your premium quarterly. To take advantage of the early payment discounts, many businesses choose to finance their WorkCover premiums – which also helps them to manage their cash flow by spreading payments over a monthly plan.
If you’d like to talk to a WorkCover specialist about your Premium Notice or improving your claims management processes, we’re here to help – just call us on 03 9863 8408 or email info@riskstrategies.com.au