Are you legally defined a “worker” - new Queensland legislation?
21 May 2014
If you’ve been injured at work in Queensland, there’s been an important change to the Workers’ Compensation and Rehabilitation Act 2003 that you should know about.
The change is to how “worker” is defined under the Act for the purposes of claiming workers’ compensation in Queensland.
The new legislation, which came into force on 1 July 2013, aligns the definition of “worker” with the PAYG test applied under Australian tax laws. This means that employers can use this definition when declaring a worker’s wages for calculating their workers’ compensation premium. It also means that it is more difficult for employers to avoid paying workers’ compensation insurance premiums in Queensland.
The definition of a worker is set out in an amended section 11 of the Act and is “a person who works under a contract and, in relation to the work, is an employee for the purpose of assessment for PAYG withholding under the Taxation Administration Act 1953 (Cth), schedule 1, part 2-5”.
The most significant effect of this new definition is that injured workers will no longer be covered for workers’ compensation if they:
• supply and operate their own plant or equipment as part of their contract (e.g. bob cat, tow trucks and taxi trucks)
• work predominately for labour only, quote for the job, provide their own tools, rectify their own defects at their own expense and employ other workers
• have a personal services business determination (PSBD) from the ATO.
Under tax law, these workers are ‘independent contractors ’.
But, an employer who incorrectly characterises a worker as an ‘independent contractor’ as opposed to an ‘employee’ opens themselves up to a number of legal risks. The employer may:
• be in breach of tax laws
• be ordered to pay workers for accrued entitlements under industrial laws, awards or agreements, and to pay civil penalties for any breaches of the relevant law or instrument
• be vicariously liable for the acts or omissions of the worker
• be denied indemnity by its workers’ compensation insurer for understating its wages bill.
The change to the definition of a “worker” has little effect on who may be entitled to workers’ compensation, so many workers engaged under an ABN may still be covered for injuries sustained in the course of their employment.
If you’ve been injured at work in Queensland and you’re not sure whether you’re defined as a “worker” under the new workers’ compensation legislation, the experienced team at GC Law can help. Call us on 1300 302 318 or email us today.