Worker definition changes
What is the definition of a worker?
The definition of a worker aligns with the Australian Taxation Office (ATO) definition. This reduces red tape and makes it easier for employers to correctly identify workers when declaring wages for their premium. Also, workers clearly know if they are covered or not.
The new definition of worker is 'a person who works under a contract and, in relation to the work, is an employee for the purpose of assessment for PAYG withholding under the Taxation Administration Act 1953 (Cwlth), schedule 1, part 2-5'. This applies to a person for whom PAYG tax instalments are required or would be required to be withheld by their employer.
ATO guidelines and tools
ATO has guidelines on its website and an online tool for determining employee / contractor status. If an individual is not specifically included or excluded under Schedule Two of the Act, WorkCover will use the ATO guidelines and tool to determine who should be covered for workers' compensation. After using the tool, a copy of the determination can be kept as a record.
Understanding the definition of a worker
We want to ensure everyone understands the definition of a worker. Here are some helpful links:
- Review the table below which outlines worker status
- Read our Frequently Asked Questions
- Review the information under Who should I cover? and Worker determination
- Use our employer guide to take you through the steps to identify a worker vs a contractor
- Look at Mistakes to avoid relating to employees versus contractor on the ATO website
- Use the ATO online decision tool to work out specific contracting arrangements
- View our webinar, or short summary video.
The majority of workers will continue to be covered for workers' compensation.
For more information, contact your Relationship Manager, or call WorkCover on 1300 362 128.
Key changes and worker status introduced on 1 July 2013
|Change relating to individual contractors||Worker status|
|Owner bobcat, backhoe operators working on an hourly rate||Not covered|
|Owner truck drivers working on an hourly rate or per kilometre rate or piece work (e.g. prime movers, taxi trucks, cement trucks, tow trucks)||Not covered|
|Contracts with partnerships of individuals||Not covered|
|Contractors working mainly / substantially for labour only, quote for the job, provide their tools of trade, rectifying defects at their own expense and subcontracts / employs labour||Not covered|
|Person has a personal services business determination (PSBD) from ATO||Not covered|
|No change to the following building and construction individual contractor scenario|
|Contractors providing their tools of trade, consumables, getting paid an hourly rate or piece work rates – e.g. specifically, plasterers providing their tools of trade, consumables like glue, nails, getting paid an hourly rate or piece work rates||Covered|
|Contractors providing all major materials, their tools of trade, providing an upfront total price for the job (quote for the job), rectifying defects - e.g. specifically carpenters providing timber, their tools of trade, providing upfront total price for the job, rectifying defects at their own expense||Not covered|
These scenarios are not exhaustive – any change to the specific contracting arrangements may change the decision.
- Last updated
- 14 June 2019