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NSW workers’ compensation changes for small business people

Update August 2013

Background:  Across Australia there’s been a nightmare of confusion for years. Workers’ compensation laws are unclear on when businesses are supposed to pay premiums when they engage independent contractors. We explained the problem in 2012.

Two things result. Premiums are often double-paid. Or the engaging businesses don’t pay the premium (believing they are not required to). They are then audited and slammed with massive back bills. We made recommendations for changes (that is, clear laws) last year.

The Queensland government has made legislative changes that we think are positive.

NSW reforms workers’ compensation administration
: NSW has kept the same laws in place but made significant changes to the way the laws are administered. ICA has been receiving positive reports of a much more sensible approach to the law by the Workers’ Compensation Authority.

NSW has established 2 new bodies:

Worker Status Rulings Branch
This service offers:
  • a Worker Status Rulings Branch within WorkCover to provide specialised assistance to employers
  • a private ruling service to determine whether a person (or class of people) is a worker for premium calculation purposes.  Employers can apply to WorkCover to issue a private ruling.
A private ruling is a binding notice from WorkCover that states whether a person, or group of persons, are workers or contactors for the purpose of including wages for workers’ compensation premium calculations.

NSW Independent Complaints Office
This body handles complaints for both businesses and workers.

NSW has also put through other changes for small business people

These include:
  • A reduction in average workers’ compensation premiums of 7.5 per cent.
  • Reclassification of more businesses as ‘small’.
  • Introduction of a 10 per cent premium discount up-front at each policy renewal which is retained if no workers are off injured for more than 4 weeks during the policy period.
  • Removal of the need to estimate wages at time of renewal.  
  • A 5 per cent discount for paying the full premium by the due date.
These constitute significant cost and red-tape savings for small business people.

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