New Changes to WorkCover

The WorkSafe Premium Policy Team has just published a new Contractors and Workers Guideline on the WorkSafe website which is summarised below for your convenience.

The guideline replaces the three previous guidelines: General Contractor Provisions and Rules for Incorporated Contractors, General Contractor Provisions Contractor Deductions, and Contractor Provisions Contracts Mainly for Equipment or Materials.

The guideline has been simplified into easy steps which assist in identifying if an individual is a common law worker, a deemed worker or if they are carrying on an independent business.

The guideline also assists employers to determine what ‘remuneration’ is for premium purposes when a contractor is identified as a worker of the hirer.

The important elements are listed as below: If you have hired a contractor you must check whether the individual who actually does the work for you will be your worker for workers compensation purposes. You must do this regardless of the business structure that is being used by the contractor.

The term ‘contractor’ covers a wide variety of individuals who may operate as sole traders or through other entities.

So, if the person that is hired by you is able to tick all the boxes in relation to the tests below, then they need to be insured by you:

  • The person performs the work under your direction and control on an ongoing basis.

  • The person generally works standard or set hours under your direction.

  • The person cannot subcontract/delegate the contract work or pay someone else to do the work.

  • The amounts payable by you for the work are for the time worked, a price per item or activity, or a commission rather than for a result achieved based on the quote provided.

  • You provide all or most of the equipment, tools and other assets required to complete the contract work, or you provide an allowance to, or reimburse the sole trader.

  • The sole trader is not operating independently of your business but works within and is considered part of your business.

If all or most of the above factors apply to the working agreement or contract, then it is likely that WorkSafe will consider the sole trader to be your worker. None of these factors are definitive. WorkSafe will consider the whole of the relationship between you and the person doing the work.

The guidelines are contained in more detail in the link:

Should you have any questions about determining your status, please contactLowensteins.