All employers in NSW (except exempt employers) must have a workers compensation policy to insure themselves against compensation claims for workplace injuries.
This legal requirement is set out in section 155 of the Workers Compensation Act 1987. An employer is a business (including an individual) that employs or hires workers on a full-time, part-time or casual basis, under an oral or written contract of service or apprenticeship or traineeship. When employers take out a workers compensation policy with a Scheme Agent, this policy covers any of the employer's workers (whether permanent or casual) in the event of them suffering a work-related injury or illness.
In the event of a workplace injury or disease, the policy makes provision for the worker to receive benefits which may include:
- weekly benefits
- medical and hospital expenses
- rehabilitation services
- certain personal items (eg clothing, spectacles, if damaged in a work-related accident)
- a lump sum payment for permanent impairment.
The policy must cover all workers.
Some people are ‘deemed’ to be workers for workers compensation purposes. Deemed workers – outworkers, taxi drivers and some contractors – must also be covered by a workers compensation policy.
Working Directors of a corporation (Pty Ltd) are considered to be employees of the company and their wages must be included for premium calculation purposes.
Employers who pay $7,500 or less in annual wages are not required to hold a policy of insurance unless they employ an apprentice or trainee, or are part of a group for premium purposes.
Exempt employers are 'deemed' to hold a policy and have the same obligations as non-exempt employers to provide assistance with injury management and return to work.
Immediately an exempt employer becomes aware that their wages are likely to exceed $7500 they must take out a workers compensation policy by contacting a WorkCover Scheme Agent. This policy will run for 12 months from 4.00 pm on the day that the employer contacts the Scheme Agent.
If someone who works for an exempt employer is injured, the injury must be notified to the WorkCover Claims Assistance Service (13 10 50). The exempt employer needs to pay an administration fee of $175 and the claim is assigned to one of the scheme agents.
The same administration fee applies to each injury notified by an exempt employer.
Call 13 10 50 for more information about insurance.