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NSW Workers Compensation

A number of important changes to the laws regarding Workers Compensation came into effect on the 30th June 2008. Some of these important changes are detailed below.

Employers who pay $7,500 or less in annual Wages:-

Employers will no longer be required to obtain a Workers Compensation Insurance Policy for their workers if they pay, or expect to pay $7,500 or less in annual remuneration. Remuneration includes wages and other amounts such as allowances, fringe benefits, superannuation and payments made to contractors who are deemed to be workers under the Act. However, if an employer engages apprentices or they are a member of a Group for workers compensation purposes, they are still required to take out a Workers Compensation Policy regardless of the level of wages they pay.

Section 155AA of the Act now defines and “Exempt Employer” as an employer who has reasonable ground to believe that the total amount of wages paid in a financial year will not exceed $7,500.00.

As an “Exempt Employer” they will receive automatic cover from the “Nominal Insurer”. In other words, they will not be required to pay a workers compensation premium. Even so, their normal obligations under the Act as an employer still apply.

Employers who pay more than $7,500 in annual wages:-

If you engage workers or contractors deemed to be workers and you pay, or expect to pay more than $7,500 a year in remuneration, or if you engage apprentices or are a member of a Group for workers compensation purposes, you must take out a Workers Compensation Insurance Policy.

Generally a worker is someone who receives wages or commission, regardless of the number of hours worked each week, and includes workers who work away from the employers premises. If a person or business employs or hires workers on a regular, casual or contract basis, they are considered to be an employer and must have Workers Compensation Insurance Policy.

Penalties may apply in the event that you under estimate your rateable remuneration or fail to notify your Agent of the correct figure within 28 days of exceeding your last estimate.

Claim for Compensation

If you are not required to have a policy and one of your workers makes a claim for compensation, you must report the claim to WorkCover. A policy will be created by the insurer for the management of the claim and you will be required to pay a fee of $175 for any claim.

If you are required to have a policy but you do not have a current Workers Compensation Policy in place and your worker/employee has a work related injury or illness, the benefits payable to the worker will be made by WorkerCover’s Uninsured Liability and Insurance Scheme. As an uninsured employer, you may face penalties for failing to hold a policy and you may be liable for the full cost for any claims incurred while you were uninsured.

Record Keeping Requirements

Wages information is required to be retained for five years.

Previously the legislation required employers to retain all records for a period of seven years.

However under the changes, the administrative burden on businesses will be reduced, by decreasing the requirement to retain Workers Compensation Insurance records to five years.

Further Information

Further information is also available on the WorkCover website below:

http://www.workcover.nsw.gov.au

The Strata Agency works with a number of specialist strata insurers, if you would like any further information please contact us.