Covering your workers

You must provide workers’ compensation for anyone you employ who the legislation defines as a ‘worker’, including cover for claims at common law.

The definition of a 'worker' covers:

• full-time workers on a wage or salary
• part-time, casual and seasonal workers
• workers on commission
• piece workers
• working directors
• contractors and sub-contractors (in some circumstances)
• family members.

This definition is broad and can be broken up into two parts: primary and extended.

Primary definition of a worker

This covers any person who works under a contract of service or apprenticeship with you. The contract may be expressed or implied, oral or written. A large part of the workforce is covered under this part of the ‘worker’ definition, including:

• full-time and part-time workers
• casual workers
• seasonal and piece workers
• workers on salary or wages
• workers supervised and controlled by an employer
• workers who may be fired by an employer
• workers who work for only one employer
• workers with set hours of work.

Extended definition of a worker

This covers any person who works under a contract for service. Many people who work as contractors or sub-contractors may be covered under this part of the definition, and it may cover workers who:

• are paid on piece rates, hourly rates or per job
• work for the employer on a ‘one-off’ or per job basis
• do not have set hours of work
• work for more than one employer
• work unsupervised
• pay 20% prescribed payments (sub-contractor’s tax)
• are covered by an industrial award or agreement.

Exclusions

Generally, individual workers cannot cover themselves for workers’ compensation, even if they are self-employed and have an ABN. An exception is when an individual is a working director of a company.

Avoidance arrangements

Employers cannot contract out of liability under the Act by making a worker sign an agreement that says they are not entitled to claim workers’ compensation. For more information, see the avoidance arrangements section of the costs of non-compliance page.