Additional Case 12.2
Tri-State Shipping employs 45 workers. They ship commodities across the country. Until recently, they had only legally required benefits, but business has become very profitable and they can now offer their employees more benefits.
The average age of their employees is 50. Most employees have been there for more than 20 years, and the company prides itself on keeping workers. The majority of the jobs require heavy lifting or the operation of heavy equipment for loading and unloading trucks, trains, etc. Their workers' compensation tax has been running about 5% per year. They are in one of the lowest workers' compensation tax rate states, but TSS has had a lot of injuries. The lifting required and type of equipment used tends to result in a lot of sprained backs, mashed fingers, or bruised muscles. When workers are injured, they tend to heal quickly and return to work quickly.
Despite its reputation for keeping workers, the dock supervisor recently fired a 21-year old employee who had been with TSS for 12 months. Even though everyone liked him, the young man just couldn't learn his job.
-Refer to Additional Case 12.2.Tri-State Shipping's workers' compensation tax rate is probably mostly influenced by their:
A) experience rating.
B) workers' average age.
C) health insurance benefits.
D) probability of injury.

Question

Quizplus · Accepted Answer

The workers' compensation tax rate is most likely influenced by TSS's experience rating, which is based on their history of claims and costs associated with those claims. The fact that TSS has had many injuries could negatively impact their experience rating and therefore increase their workers' compensation tax rate. The workers' average age, health insurance benefits, and probability of injury could also have some influence on the tax rate, but the experience rating is likely the most significant factor.

Additional Case 12.2 Tri-State Shipping Employs 45 Workers. They Ship Commodities Across the Commodities