Workers Compensation – have you got it covered?
What is Workers Compensation?
Workers compensation provides protection to workers and their employers in the event of a work related injury or disease. Through the workers compensation system, injured workers may have an entitlement to weekly payments, lump sums for permanent impairment, payment of medical bills and intensive rehabilitation assistance. New work health and safety laws replaced the occupational health and safety (OHS) laws in NSW on 1 January 2012.
Who needs a Workers Compensation policy?
All New South Wales (NSW) employers must have a workers compensation policy if they pay more than $7500 in wages per annum, employ an apprentice or trainee, or are part of a group for premium purposes.
The NSW workers compensation system comprises four elements:
1. New South Wales WorkCover Scheme – provides workers compensation insurance through contracted Scheme Agents to employers operating in New South Wales.
2. SICorp (through the Treasury Managed Fund) – manages workers compensation, administration and financial liability for most public sector employers except those who are self-insurers.
3. Self-insurers – organisations with enough capital to underwrite, pay and manage their own claims. There are strict criteria that employers must meet prior to WorkCover granting a self-insurers licence.
4. Specialised insurers – hold restricted licences to underwrite workers compensation insurance risk for a specific industry or class of business or employers.
How does a Workers Compensation policy work?
At the beginning and end of each workers compensation insurance policy period an employer must supply their Scheme Agent with a declaration of their wages. The workers compensation premium will be based on the amount of wages. Employers declare their wages on the Wages declaration form supplied by their Scheme Agent.
Where a payment to a worker is made in lieu of wages (regardless of the terminology used to describe that payment), the payment is counted as wages for the purposes of premium calculations. Total gross earnings (before tax deductions) and some payments that are not generally thought of as wages are included. Employers are required to calculate their wages for workers compensation premiums in much the same way they do for payroll tax. To see a general list of what is considered wages in these circumstances and what constitutes a group please read our article on payroll tax. It is important to be aware that apprentice wages are required to be declared separately to those of other workers.
What must employers provide?
In accordance with Occupational Health and Safety laws employers must legally and ethically provide:
• Safe premises
• Safe machinery and substances
• Safe systems of work
• Information, instruction, training and supervision for workers
• Suitable working environment and facilities
What should Return to work programs include?
Within 12 months of becoming an employer you need to have a formal program outlining how you will help injured workers recover and return to work.
Your program should describe procedures for:
• preventing occupational injuries and illness
• developing and implementing the return to work program — it has to be consistent with the Scheme Agent’s injury management program and reviewed every 2 years
• consulting with workers and, where applicable, unions
• early commencement of injury management and return to work
• providing suitable duties, including short-term duties to assist rehabilitation
• returning to work not to disadvantage injured workers — they are not to be dismissed within 6 months of becoming unfit for employment due to a work-related injury.
Here at The Quinn Group we can help you with any of your business’ Workers Compensation issues. Whether it is the calculation of wages, implementing workers compensation policies or legal matters our experienced team of lawyers and accountants can assist. Submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment.