A potential benefit of experience- rating EI premiums is that
A)it would encourage firms to go in for constructive dismissals.
B)this would increase the amount of premiums taken in.
C)it would encourage firms to find ways other than layoffs to cut costs.
D)it would reduce premiums for firms with larger numbers of experienced workers.
E)none of the above.

Question

Quizplus · Accepted Answer

The experience-rating of EI premiums would encourage firms to find ways other than layoffs to cut costs as it would incentivize them to maintain a stable workforce and retain experienced workers. This would ultimately lead to a reduction in the number of EI claims and lower premiums for firms with lower claims. A and B are incorrect as they do not align with the goal of the EI program to support workers who have lost their jobs through no fault of their own. D is partially correct but misses the point that the focus is on reducing claims rather than rewarding firms with more experienced workers.

A Potential Benefit of Experience- Rating EI Premiums Is That