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Queensland workers’ compensation changes

Fixing a major small business problem: Identifying which workers require workers’ compensation cover

Effective June 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.

Queensland has responded
. As of 1 June 2013, Queensland has a simple rule. If a business is required to send income tax to the Tax Office (under PAYG) for people it engages (employees or independent contractors), the business must remit workers’ compensation premiums on those workers. That’s pretty simple and pretty clear!

Here’s the new law put through as a simple amendment under the “Industrial Relations (Transparency and Accountability of Industrial Organisations) and Other Acts Amendment Bill 2013” The appropriate changes are to the Workers' Compensation Act and read:

71 Amendment of s 11 (Who is a worker)

Section 11(1)—
omit, insert
(1) A worker is a person who—
(a) works under a contract; and
(b) in relation to the work, is an employee for the purpose of assessment for PAYG withholding under the Taxation Administration Act 1953 (Cwlth), schedule

72 Amendment of s 30 (Who is an employer)

Section 30(1)—omit, insert—(1) An employer is a person who engages a worker to perform work.

73 Amendment of s 66 (Employer’s liability for excess period)

Section 66(4)(b), ‘the contract of service’—omit, insert—a contract

74 Amendment of s 585
(Entitlements to compensation under contract of employment prohibited and void) Section 585(3), definition contract of employment, ‘of service’— omit, insert—with a worker

What this means in practice
If a party is responsible for withholding income tax from a worker under PAYG, it will also be responsible for paying workers’ compensation premiums on the worker (and managing claims, etc.).

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