What is a Labour Hire Agency?
The Queensland Industrial Gazette defines a labour hire agency as: An employer who is wholly or substantially engaged in supplying workers to another entity (the client business) on a fee or contract basis; and is not a separate service entity for the client business.
A labour hire agency is responsible for providing temporary staff to employers. Employees are paid by the labour hire agency for the work they conduct at the clients' site. Labour hire companies refer to these clients as the host employer.
Labour hire companies generally invoice the host employer at an hourly or daily rate with a charge rate on top. There is never invoicing for materials or tools included, as that would indicate the worker is being provided for more than just their labour, and is there to perform a specific service.
Some labour hire companies will specialise in a particular type of worker and some entities will supply various types of workers across various industries.
What is different about a Labour Hire Agency?
As a labour hire agency can supply workers to a number of different businesses, the policy is required to have each of the Labour Hire Workplace Industry Classifications (WICs) allocated to the policy.
There are 20 classifications listed, one for each of the 19 ANZSIC divisions and also we must add WIC 721236—Contract Staff Services (Own Administration Staff). This WIC is for internal staff employed by the labour hire agency such as recruiters, administration staff etc.
Refer to Part 7 of the Gazette Notice and ANZSIC Online
With the exception of WIC 721236, Section 22 of the Gazette Notice tells us that wages must be declared against WIC relevant to the class of the client business (host employer).
If you are a labour hire employer, WorkCover will allocate wages to the WICs listed in Part 7 in the following manner:
- in respect of WIC 721236, wages are to be allocated in accordance with Section 22; and
- with the exception of WIC 721236, WorkCover will allocate wages to a WIC or WICs listed in Section 22 based on the WIC of the policy of each client business to which the employer supplies workers.
Example – A chef, who works for a mining company, would need to have their wages placed against the Mining WIC.
As an employer you need to remember this simple tip that it is industry not occupation.
If you are not sure what WIC the host employer would fall under, you can use our Verification of Cover tool to obtain or you can discuss with your WorkCover Relationship Manager.
It is important to declare your wages and ensure your claims for workers are placed against the WIC relevant to the host employer. The experience gathered under the WIC impacts not only your policy moving forward but the rest of the labour hire industry.
At the time of claim determination, it should always be confirmed and clearly file noted who the host employer was at the time of the injury so that it can be checked that the claim has been assigned to the WIC relevant to the host employer. If the claim has not been assigned correctly, it should at that time, be moved to the correct WIC.
It is important that you understand not only that wages must be declared against the WIC relevant to the host, but also what wages are declarable to WorkCover.
Schedule 6 of the Act outlines 'wages' as:
Total amount paid, or provided by, an employer to, or on account of, a worker as wages, salary or other earnings by way of money or entitlements having monetary value, but does not include–
- allowances payable in relation to any travelling, car, removal, meal, education, living in the country or away from home, entertainment, clothing, tools and vehicle expenses
- lump sum payments on termination of a worker's services for superannuation, accrued holidays, long service leave or any other purpose
- claims excess paid to the worker.
Understanding what is declarable as wages to WorkCover is important, as the wages declared affects how your premium is calculated. The following should be included in your wages declaration:
- gross salaries and wages (including annual leave, sick leave, long service leave)
- overtime payments
- all superannuation payments (Compulsory Superannuation Guarantee Levy and any payments you make in addition to this)
- salary sacrifice by your workers
- allowances which are not reimbursement of workers' expenses (e.g. shift allowance, higher duties, site allowance, height allowance)
- any benefits having a monetary value (e.g. workers home garaging company car)
- board and lodging (premises you provide to your workers)
- payments to individual contractors deemed workers (excluding GST).
- Last updated
- 31 October 2016
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