As an employer, you have a responsibility to protect your business and staff by declaring wages for all relevant workers. The legislative definition of ‘employers’ and ‘workers’ is different to the way that we use these terms in the everyday sense. Some people are 'deemed' to be workers for workers insurance purposes. Use our definitions and guidelines below to make sure you understand your legal obligations.
Identifying 'deemed' workers
Some people are 'deemed' to be workers for workers insurance purposes.
These classes of 'deemed workers' include, but are not limited to:
- salespersons, canvassers, and collectors
- contractors under labour hire service arrangements
- rural workers
- boxers, wrestlers, referees and entertainers.
See Schedule 1 of the Workplace Injury Management and Workers Compensation Act 1998 for a comprehensive list.
Distinguishing workers and contractors
Other than deemed workers, you are not required to provide workers insurance for contractors.
Several factors need to be considered to distinguish a worker from a contractor and no single factor can be regarded as decisive.
A contractor is more likely to:
- be engaged to carry out a particular task using their own skill and judgment
- employ others, delegate or sub-let work to another
- be paid on the basis of a quotation for the job
- supply their own tools and materials
- carry on an independent business in their own name or under a business or firm name.
Please note: An ABN by itself is not a definite indicator of a person(s) status.
A worker is more likely to:
- be directed by the employer regarding work to be performed and the time and manner in which it is performed
- be required to actually carry out the work
- be paid on a time basis
- have tools and materials supplied by the employer
- work exclusively for a single employer
- be affected by PAYG tax arrangements.
Please note: A person may have been hired as a contractor and be a contractor for other purposes such as tax, but still be a worker for the purpose of workers insurance. The status of a person for tax purposes bears no direct relationship to that person's status as a worker for workers insurance purposes.
SIRA's Worker Status Service
The State Insurance Regulatory Authority (SIRA) has a tool to help guide you as to whether a person is a worker, a deemed worker or contractor for workers insurance purposes.
This tool is a guide only. To formally determine a worker’s status, you'll need to lodge a private ruling application with SIRA.
Volunteers and unpaid work experience students are not 'workers' under the Workers Compensation Act 1987 and you do not need to cover them with your workers insurance policy. You still have a 'duty of care' to make sure volunteers and work experience students have a safe working environment.