Workers Compensation Information, Facts, Figures, Questions

Workers’ compensation insurance

Workers Compensation protects you and your business from financial claims when a worker sustains a work related injury or disease. It also provides injured workers with payments to cover loss of earning capacity and reasonable medical and vocational rehabilitation expenses, and assists them to remain in or return to gainful employment. In some circumstances they may also receive specialised retraining or lump sum settlements. Workers are covered while they are working for your trade or business and/or acting under your instructions.

Wages

The term ‘wages’ includes all gross salaries, remuneration, commissions, bonuses, overtime,
allowances and the like, directors’ fees and all other benefits (including piece work
rates or otherwise, cash or in kind) paid to or in relation to a worker before deduction of
income tax.

Definition of a worker

The primary definition of a ‘worker’ is very broad. It covers full-time workers on a wage or salary and also part-time, casual and seasonal workers, workers on commission and piece
workers. Contractors and sub-contractors may also be defined as ’workers’, depending
on the circumstances of their working arrangement.

What about contractors and sub-contractors?

A contractor or sub-contractor may be defined as a ‘worker’ if the following
occurs: 1. The contractor/sub-contractor is engaged by another person to do
work which is for the purpose of the other person’s trade or business.
2. The contractor/sub-contractor is paid in substance for his/her personal
manual labour or services.

Should I cover working directors?

A working director means a director of the company who executes work for or on
behalf of the company, and whose earnings as a director of the company, by whatever
means, are in substance for personal manual labour or services.
It is optional for a working director’s company to cover their directors for workers’
compensation.

Should I cover family members?

Where family members are employed by you (or contracted to you) and live in the
family home, it is optional whether you cover them for workers’ compensation. If
cover is required, family members must meet the definition of a ‘worker’ under
the Act and their name and the work they do needs to be disclosed on the
policy, together with an estimation of their wages/salary.

Have an injury management system in place before an injury occurs
An injury management system describes the steps that an employer will take when
a workplace injury occurs. It ensures that the employer is able to commence injury
management quickly and properly, so that injured workers can remain at work or return
to work at the earliest appropriate time.

The injury management system should be described in writing and you should make
a copy of the document available to any of your workers who request it.
Depending on the characteristics of the business and the resources available, a fairly
simple process will be sufficient in most cases. Be prepared and know what
to do.

Did You Know?

The major cost component of workers’ compensation claims is loss of wages.
Reducing the time off work following an injury will save you money.
You and/or your company may be liable if you do not provide safe working conditions for your employees.

You must have workers’ compensation insurance for all your employees.