Workers’ Compensation for Contractors – Are You Covered?
As work arrangements continue to evolve, understanding workers’ compensation for contractors is essential. Whether you are a contractor, sub-contractor, sole trader, or freelancer, knowing your WorkCover entitlements can protect you in the event of a workplace injury. Don’t wait until it’s too late to ask: “Does workers’ compensation cover contractors?”.
A common mistake many independent workers make is assuming they are covered by an employer’s workers’ compensation insurance, only to find out they are not eligible for a claim. In some cases, contractors may need to take out their own workers’ compensation insurance to ensure coverage.
Not being insured can leave you without financial protection if you suffer an injury while working. That’s why it’s crucial to understand your workers’ compensation rights as a contractor before an accident occurs.
Workers are defined by the NSW legislation as a person who works under a contract of service or a training contract with an employer. This area of law is difficult and specific to individuals circumstances. In some cases what you may think is a subcontractor could be considered an employee and vice versa. When faced with a work-related injury, deemed workers are entitled to claim compensation for their losses.
Although the Workers Compensation Act 1998 (NSW) has a detailed classification of contractors who can be considered as deemed workers for insurance purposes, distinguishing between a contractor and a worker can still be confusing. Determining a contractor’s entitlement to workers insurance depends on a variety of criteria. According to iCare, a contractor is more likely to
- be engaged to carry out a particular task using their own skill and judgement
- employ others, delegate and sub-let work to another
- be paid on the basis of a quotation for the job
- supply their own tools and materials
- carry on an independent business in their own name or under a business or firm name.
A worker, on the other hand, is more likely to
- be directed by the employer regarding work to be performed and the time and manner in which it is performed
- be required to actually carry out work
- be paid on a time basis
- wear company uniform
- have tools and materials supplied by the employer
- work exclusively for a single employer
- be affected by PAYG tax arrangements.
It is important from the outset of your employment to understand and for it to be clearly documented whether you are an employee or not. It is important to ensure that you are covered in the unfortunate event that you are injured in the course of work but are not covered because you thought you were an employee covered by your employer however you are in fact not an employee and did not take out your own workers compensation insurance.
State Insurance Regulatory Authority (SIRA) also has an online tool to help determine a person’s worker status for workers insurance purposes, which can be accessed via this link.
If you are still unsure about your status regarding workers insurance, our workers compensation lawyers can offer guidance on your situation and help you claim your rights and entitlements. Our workers compensation lawyers are approved by the Workers Compensation Independent Review Office (WIRO) which means you do not pay for our costs and disbursements. For further information you can call us on 1800 952 898.
Issa Rabaya
• Bachelor of Laws
• Graduate Diploma in Legal Practice
• Approved Legal Service Provider to the Independent Review Office
• Member of the Law Society
Issa Rabaya
• Bachelor of Laws
• Graduate Diploma in Legal Practice
• Approved Legal Service Provider to the Independent Review Office
• Member of the Law Society
