You must have workers’ compensation insurance for anyone you employ who the legislation defines as a ‘worker’, including cover for claims at common law.
By keeping a current workers’ compensation insurance policy and having an injury management system in place, you will ensure compliance with the Workers’ Compensation and Injury Management Act 1981.
See the Getting an insurance policy section for more details on how to cover your workers and your business against workplace injury.
Definition of a worker
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 (optional)
- 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 per cent prescribed payments (sub-contractor’s tax)
- are covered by an industrial award or agreement.
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.
Employers cannot contract out of their 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 ‘avoidance arrangements’ in the Costs of non-compliance section.
If you employ or contract a family member, you must cover them for workers’ compensation – even if they live in the family home.
Contractors & subcontractors
Find out about the obligations to cover contractors and subcontractors, including subcontractors working as part of a ‘team’.
Go to Contractors & subcontractors.
Find out about obtaining cover for working directors.
Go to Working directors.