Workers’ compensation experience rating rules and the danger to workers’ safety in the temporary work agency sector

Ellen MacEachen, Institute for Work & Health, Toronto, Canada


Objective: This study explored how temporary work agencies in Ontario, Canada carry out workplace injury prevention and return to work. It aimed to understand why these agencies would shoulder experience rating costs when they cannot control the work environment.

Methods: Focus groups and in-depth interviews were held with 64 participants between 2009 and 2011. Participants included low-wage agency workers, temporary work agencies, client employers and key informants. Legal and documentary data were also analyzed.

Results: Findings showed how experience rating rules create a market for outsourcing risky jobs to temporary work agencies, which cannot properly manage injury prevention and return to work. The researchers detailed how agencies are positioned to absorb experience rating costs for their clients and avoid financial risk through cost transfer, premium rate groups, legal positioning, influencing accident reporting practices, and shutting down and reopening the business. The findings also showed how experience rating arrangements can distort the responsibility these agencies have for work and health. In Ontario, these facilitate employer “gaming,” largely within the rules.

Conclusion: By putting a price on workplace health and linking this to costs incurred in individual businesses, experience rating rules encourage employer “gaming”—cost-reduction attempts that do not necessarily increase workplace safety. Experience rating rules, together with the rise of non-standard employment arrangements, have fostered the growth of the temporary work agency sector to which employers can outsource workplace injury risk. The researchers propose that workplace health would be less of a tradable commodity, and workers’ safety and return to work a more significant priority for employers, if experience rating were applied to the client employer who controls the conditions of work.

Authors: Ellen MacEachen, Katherine Lippel, Ron Saunders, Agnieszka Kosny, Liz Mansfield, Christine Carrasco and Diana Pugliese

Reference: Workers' compensation experience-rating rules and the danger to workers' safety in the temporary work agency sector. Policy and Practice in Health and Safety, 2012; 10(1):77-95.