Workers’ Compensation Insurance - The Necessary Protection Business Owners Need.
Risk and business often go hand in hand, but if you’re running your business without Workers Compensation Insurance, then you’re facing a gauntlet that really isn’t required.
In New South Wales, Workers Compensation Insurance is a legal requirement, but we’re often surprised to find employers caught unaware of this. Here’s what you need to know.
Who Exactly is Required to Have Worker’s Compensation Insurance?
It’s important to bear in mind that each state has its own laws, however, if you have workers and pay them more than $7,500 per annum, either full time, part time or casual employees, then you are likely required to have Workers Compensation Insurance.
While it is a legal requirement, it’s also important to remember that it’s also a wise choice as well. Insurance is another cost to add to your list, but the risk of having to face a payout without insurance to back you up is another daunting possibility. No one plans to face workers compensation, employee injuries or any kind of failed plans, but the truth is that we simply can’t foresee the ins and outs of what our businesses will face, and having protections in place for the worst case scenario can potentially save your business from disaster.
How Do You Define a “Worker” When It Comes to Workers Compensation?
A worker is any of the following -
an employee (the difference between an employee and a subcontractor HERE),
It can also include people working for you on a contract or through a subcontractor arrangement,
a working director,
payments to working trust beneficiaries (think super contributions, distributions etc in lieu of wages),
a household who hires a babysitter.
By the same token, a worker is NOT a sole trader / proprietor or member of a partnership.
Is Workers Compensation Insurance Compulsory?
Workers Compensation Insurance is compulsory for all employers in NSW.
Not having a policy in place for your business could have you facing a fine of up to $55,000 and/or facing a term of 6 months imprisonment… You don’t want to ignore this one, for more than one reason.
So What Should You Do?
Check your state based rules and go and get yourself some quotes from insurers.
Don’t wait - this isn’t something you should be sitting on your hands about. Make sure you have a policy in place as soon as possible.
Make sure you take advantage of opportunities to reduce your premiums. You may be able to implement return to work incentives, or pay your fees up front in order to reduce costs.
Talk to your friendly expert accounting team to chat through any questions or details that aren’t clear.
A Business Accounting Specialist Can Help
Having a team of expert business advisors available to help you face whatever challenges or opportunities come your way is a fantastic way to start.
Owning a business can certainly be stressful, but it doesn’t have to be. We charge business owners a flat fee each month, which means you can ask us any questions you need, whenever you need to, without having to worry about receiving an unexpected bill in the mail.
