What are the employer's obligations regarding workers' compensation insurance?

Employers must arrange a workers' compensation policy if they employ a worker.

A worker is a natural person who, performs work or a service of any kind for another person under a contract and is in relation to the contract and employee for the purpose of assessment for PAYG withholding under the 'Taxation Administration Act 1953 (Cth)', Schedule 1, Parts 2-5, even if the employer is not withholding tax when they should be.

If it is determined a person is an employee using Australian Tax Office (ATO) guidance (even if the employer thinks they are a contractor) then the individual should be covered for workers' compensation.

If you, as an employer, are unsure if you require a workers' compensation policy, then you should seek independent professional advice on tax and other employer obligations.

An on line tool is available on the ATO website to assist employers to find out whether your worker is an employee or contractor for tax and super purposes. If your business engages and pays workers, you should use this decision tool.

If you are a director of a company, you are only covered if your company has taken out a workers' compensation policy with an approved insurer and your personal details and your remuneration have been disclosed to the insurer.

If the business is owned by an individual or partnership (not a company) family members of those individuals are only covered if their personal details and their remuneration are disclosed to the insurer.

How are workers' compensation premiums calculated?

Approved insurers determine the rates and premiums charged to the employer. This is based on the industry type, claims history, payroll and number of employees. A good claims record in conjunction with good workplace safety practices may influence the premium to be paid.

What constitutes wages, salaries or remuneration for the purposes of workers' compensation premium calculations?

The prescribed Employers Indemnity Policy in Schedule 2 of the Return to Work Act 1986 provides that premiums shall be regulated by the amount of wages, salaries and all other forms of remuneration paid or allowed to workers during each period of indemnity. Condition 11 gives the insurer the right to inspect wage records.

To help ensure a consistent interpretation for employers and insurers the Work Health Authority provides the following guideline:

Wages, salaries and remuneration includes:

Wages, salary, overtime, shift and other allowances, over-award payments, bonuses, commissions, payments for public and annual holidays (including loadings), payments for sick leave, payments for long service leave (including a lump sum payment instead of taking long service leave) and including but not limited to:

  • The market value of board and lodging and electricity provided by the employer for the worker.
  • The total value of any salary sacrificed amounts, for example motor vehicles (including fringe benefits applicable to these salary sacrifices).
  • Superannuation contributions that would be payable to a worker as wages or salary if the worker so elected (for example, salary sacrificed superannuation).

The following are not usually included:

  • Workers' compensation payments made under the Act.
  • Maternity or paternity leave payments, including payments under the Australian Government's Paid Parental Leave Scheme.
  • Superannuation that is paid by employers under the Compulsory Superannuation Guarantee Levy, including contributions made by the employer over and above the compulsory levy.
  • Any and all payments for retirement, redundancy or termination.
  • The value of staff discounts.
  • The value of costs reimbursed to workers that were incurred in earning their income.

These are not prescribed by the legislation, but are simply guides for insurers and employers.

Do I have to register as an employer with NT WorkSafe for the purposes of workers' compensation?

In the Northern Territory, employers do not register as an employer with NT WorkSafe. However as an employer you are required to have workers' compensation insurance cover with one of the NT approved workers' compensation insurers.

Your workers' compensation insurer will advise NT WorkSafe of all new and renewed workers' compensation policies and this will include your details.

What are the employers obligations if a worker makes a claim?

When a worker is injured and seeks to make a workers' compensation claim, an employer should:

  • Make a compensation claim form available to the worker.
  • Forward the worker's claim form to the insurer within three working days of receiving it from the worker.
  • If the insurer accepts liability for the worker's claim, then weekly payments of compensation must be made by the employer commencing within three working days of the decision to accept the claim. These benefits are payable from the date of first incapacity.
  • If the insurer defers liability, weekly payments of compensation must commence within three working days of that decision. These payments are to continue for up to eight weeks within which time the insurer will either accept or reject liability. If the claim is subsequently accepted, the compensation owing must be offset by any amounts paid during the period of deferral. If the claim is disputed the deferral payment will cease. This payment is not recoverable from the injured worker.
  • Take reasonable steps to provide the injured worker with suitable employment.
  • Take reasonable steps to retrain the worker, if required, to enable the worker to engage in suitable employment.
  • The employer must produce a return to work plan, developed and agreed between the employer and worker for any injury that involves incapacity of more than 28 days.
  • An employer will be unable to dismiss a worker for a period of six months following the date of injury unless during that period the worker ceases to be totally or partially incapacitated because of the injury.
  • This is not to apply if the employer proves the worker was dismissed on the grounds of serious and wilful misconduct.

Do I have to assist my injured worker to find suitable employment?

As an employer you must:

  • Take reasonable steps to provide the injured worker with suitable employment in accordance with the worker’s statement of fitness for work.
  • Take reasonable steps to ensure that efforts to retrain the worker are undertaken if required to enable the worker to engage in the suitable employment.
  • Give a proposal in writing for a return to work plan to the worker within seven days after the employer becomes aware that the worker's total or partial incapacity is likely to exceed 28 days.
  • Pay the costs incurred for such rehabilitation training and workplace modification as is reasonable and necessary for a worker who suffers or is likely to suffer a permanent or long-term incapacity.

Reasonable steps to provide the injured worker with suitable employment includes the referral of the worker to the alternative employer incentive scheme developed by the Authority if the employer does not have other suitable employment available. This should be done in consultation with the insurer.

Is there a requirement for an employer to have a return to work coordinator?

No there is no requirement under the Northern Territory's legislation, however, the employer must assist with any rehabilitation program and take all reasonable steps to provide suitable employment.

NT WorkSafe encourages employers to make available coordinators that act as a liaison between the injured worker, management, treating doctors, vocational providers and insurers. Rehabilitation works much more effectively when employers actively participate in the worker's recovery, and if all parties involved in the process work together.

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