Examples
Unemployment insurance is experience rated in the United States; companies that have more claims resulting from past workers face higher unemployment insurance rates. The logic of this approach is that these are the companies that are more likely to cause someone to be unemployed, so they should pay more into the pool from which unemployment compensation is paid. Unemployment insurance is financed by a payroll tax paid by employers. Experience rating in unemployment insurance is described as imperfect, due in large part to the fact that there are statutory maximum and minimum rates that an employer can receive without regard to its history of lay-off. If a worker is laid off, generally the increased costs to the employer due to the higher value of unemployment insurance tax rates are less than the UI benefits received by the worker.
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