As an employer, it's important you know who you should cover for workers' compensation. Changes to Queensland's definition of a worker for workers' compensation purposes came into effect on 1 July 2013. New legislation aligns the 'worker' definition with the PAYG test applied under Australian Taxation Office (ATO) laws.
It is important that you understand how to determine who is a 'worker' versus who is a contractor and therefore understand who needs to be covered under your Workcover policy. Firstly a 'worker' can only be an individual. If the agreement for work is between you and the employees private company, trust or partnership there is no requirement for you to cover them under your workcover policy.
Workers who are specifically included and are to be covered include:
Share farmers if they do not provide farming machinery and receive no more than 1/3 of the farm proceeds.
Salesperson paid entirely or partly by commission.
Many people work under a 'contract of service'. A contract of service refers to the contract between an employer and an employee. A large part of the workforce work under a contract of service eg the PAYG system.
To determine whether a worker is an employee (PAYG) or a contractor you need to consider the whole working arrangement and look at specific terms and conditions. The ATO have developed and online decision tool to help you.
If you use this decision tool we recommend that you keep a copy of the result in your records to support your position in the event of a claim by the work or an audit by Workcover. A small variance in the particular circumstance can give a completely different result.
As you can see determining if your staff member is an employee or a contractor is not straight forward. If you are unsure please contact Peter Flemming on 07 3878 8889 or