We are often surprised at Davidsons when we work with a new client and discover they have not been registered for WorkCover or alternatively clients who seek to manage their workcover responsibilities fail to understand rateable remuneration (what is and is not included) and other requirements of WorkCover.
As such we have prepared this article to provide a WorkCover 101 and assist all businesses that engage workers to better understand key components of WorkCover.
WorkCover insurance provides cover for the costs of benefits if your workers are injured or become ill because of their work. WorkCover entitlements include weekly benefit payments, medical treatment, rehabilitation costs, legal costs and even lump sum compensation. The amount of premiums collected in Victoria each year is based upon the projected costs of claims and the operations of Victoria’s workers compensation scheme.
If you operate a company, directors who receive remuneration are workers and covered for WorkCover purposes. It is noted however if you are a sole proprietor or a member of a partnership you are not a worker of your own business and you will not be covered by WorkCover.
If you employ or expect to employ workers, and total payment to all workers exceeds $7,500 in the financial year, then you must register for WorkCover insurance. If you do not register for WorkCover then the costs of benefits provided to an injured worker may be recovered from you and severe penalties exist for failure to register. Penalties also exist if you fail to inform of changes in your circumstances that may impact the calculation of your premium.
WorkSafe determines the size of your business using your rateable remuneration. Rateable remuneration is often confused as only being your gross wages and superannuation. Rateable remuneration also includes allowances, annual and long service leave payments inclusive of loading, paid parental leave if paid by the employer, bonuses, commissions, director fees, fringe benefits and certain contractor payments. However, motor vehicle and travel allowances are excluded as well as apprentices or trainees, compensation payments to an injured worker, portable long service leave schemes and termination payments. There is now additional requirement for the inclusion and exclusion of jobkeeper payments. Care must be taken in estimating and calculating your rateable remuneration.
If your rateable remuneration was $200,000 or less, then your premium is calculated using your industry rate and your rateable remuneration. It is only if your rateable remuneration exceeds $200,000 that any recent claims experience is included in the premium calculation. The industry classification is determined when you first register for WorkCover by providing details of your workplace(s) including a description of the activities carried out there. Industry rates are then calculated using the experience of all employers in the industry over a five year period. Selection of the appropriate industry classification can have a significant impact on your WorkCover premium amount.
You do not register for WorkCover direct with WorkSafe. Worksafe appoint agents to manage employers WorkCover insurance and injured workers compensation claims. They provide expert advice and support on your behalf. WorkCover agents include Allianz, CGU, EML, Gallagher Basset and Xchanging.
Key dates for WorkCover include
- 9 July 2020 – premium renewal notices issued
- 23 October 2020 – certify your rateable remuneration for 2019-20 (rateable remuneration > $200,000)
- 1 November 2020 – due date for annual premium payment (without early payment discount noting that monthly and quarterly payment options exist in certain circumstances)
- 26 March 2021 – complete your declaration of rateable remuneration form (rateable remuneration < $200,000)
It is important to understand your responsibilities as an employer including notification of changes to your workplace or business activity, keeping remuneration details up to date, determine the inclusion of contractors, lodge WorkCover forms and pay premiums.
This article was prepared at a summary level by Clint Fraser, a Director at Davidsons and deeper detail can be reviewed at www.worksafe.vic.gov.au
Disclaimer: this information is of a general nature and should not be viewed as representing financial advice. Users of this information are encouraged to seek further advice if they are unclear as to the meaning of anything contained in this article. Davidsons accepts no responsibility for any loss suffered as a result of any party using or relying on this article.