In most cases it will be clear whether a person is your worker and therefore covered for workers compensation purposes. However, this may not be so clear for your contractors.

It is your responsibility to find out whether your contractors are considered workers by WorkSafe. If they are, this may impact your total remuneration, which is one of the key factors that influence your premium and whether you need to register for WorkCover insurance. If your total remuneration exceeds $7,500 per year, you must register for WorkCover insurance.

Each time you hire a contractor, you need to determine whether they are a 'worker' by WorkSafe. If the person is considered a worker, you effectively become their employer for WorkCover insurance purposes, and you must include the money you pay them in your total remuneration.

It is important to get this right as it is against the law if you are not registered for WorkCover insurance and paying the correct premium. You risk having to pay the amount of premium that should have been paid and penalties of up to 100% of that amount.

The process for assessing whether an individual is a contractor under the legislation is somewhat complex and can be assessed incorrectly by employers. It is also important to note there are variances between the states. Why not speak to our dedicated AB Phillips People Matters Advice staff, who can assist with this and other Workers Compensation queries.