What is a private ruling?
A private ruling is a binding notice from WorkCover that states whether a person(s) or entity is considered to be a worker or contractor for premium calculation purposes.
A private ruling is the result of a request by an employer to WorkCover to determine the status of the person(s) employed. A private ruling does not impact upon a person’s ability to lodge a workers compensation claim nor can it be used in any claims-related matters.
When can I use the private ruling system?
If you have employed, or are about to employ, a person with a different employment relationship to that of your other staff, you may need to use the private ruling system. The system - including the worker status self-assessment tool - is designed to clarify the status of that person(s) or entity. This will assist you in accurately declaring wages for premium calculation purposes.
Is there a definition of a 'contractor'
No there is no definition of a contractor. The definition provided under workers compensation law is for a 'worker'. If a person falls outside of this definition and the subsequent 'deeming' provisions, they will not be included in your workers compensation premium.
If I provide information will it affect my workers compensation premium from previous years?
Any information you provide regarding a private ruling will only impact on your current and future workers compensation policy. If your particular situation applies historically, you should contact your Workers Compensation Scheme Agent to lodge amended wage declarations for the relevant periods.
What legislation does this fall under?
The Workers Compensation Act 1987 s175C allows for WorkCover to make private rulings on the worker status based on information submitted by employers.
Will the information I provide on the private ruling application remain confidential?
Yes. The information and supporting documentation provided with your application will be used for the sole purpose of determining a private ruling. WorkCover may publish anonymous examples of your situation to assist in the education of other employers.
Why does WorkCover need this information and how will it be used?
The information you provide with your application is required so that WorkCover can accurately determine a private ruling on the status of a worker(s). Information on your worker status situation including work location, ABN and hourly rates are required to ascertain if a person is a worker or contractor.
Providing accurate and complete information will ensure the correct ruling is made by WorkCover, and will provide you with more certainty when you declare wages.
If I provide this information, will I automatically be wage audited?
No. Information supplied for the lodgement of an application for a private ruling is not used to select an employer for a wage audit. However, like all employers, your business may be subject to a wage audit as part of WorkCover’s ongoing compliance program to ensure everyone pays their fair share.
How long should I keep the private ruling for?
You must keep the private ruling together with the information/evidence on which the ruling was based with your wage records for five years.
If my situation changes, do I need to apply for a new private ruling?
Yes. You will need to apply for a new ruling. Any previous private ruling will not be binding where the situation has changed or where a later private ruling has been issued.
For example, if you were hiring a person as a sole trader and they then formed a partnership with another person, you would need to lodge a further application as this may affect the status of the person
What is the worker status self-assessment tool?
The worker status self-assessment tool is designed to help employers clarify simple worker/contractor situations. The tool is free to use and produces a report showing the decision given, how it was made and includes a summary of the information provided. All information provided remains anonymous.
The tool is the first step in deciding if you wish to apply for a private ruling. The result of the self-assessment tool is not binding and is a guide only.
Is the self-assessment tool binding during a wage audit?
The self-assessment tool is a guide only and is not binding. The self-assessment tool is designed to help employers clarify whether a person(s) is a worker or contractor. A wage audit may verify whether the information outlined in the self-assessment tool as a true and accurate reflection of the employment circumstances.
What information should be provided to substantiate a self-assessment?
Any evidence that will show that the answer given in the self-assessment is a true and accurate represtentation of the current employment circumstances. Such evidence may include, but is not limited to, invoices demonstrating employment of others, copies of quotation documents, copies of the person's certificate of currency, etc.
I have an apprentice / trainee, are they workers or contractors?
Under NSW workers compensation law apprentices and trainees in the Apprenticeship and Traineeship Act 2001, are defined as workers. From 31 December 2006 apprentice wages have been excluded from workers compensation basic tariff premiums.
What records do I need to keep for contractors?
Where employers engage contractors, they should keep the following records to justify the employment relationship, including but not limited to:
- invoices
- quotes for jobs
- certificate of currency (if appropriate)
- subcontractor’s statement
- registration of the business name
- ABN and GST details
- trade licence details
- advertisements and business cards
When using the private ruling system, employers must retain evidence to support their case. Each item alone does not prove contractor status. However, WorkCover will give due consideration to all elements when determining the status.
Call 13 10 50 for more information about private rulings for employers.