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Prosecution highlights danger for employers without workers’ comp insurance

Employers who do not meet their workers’ compensation obligations should be aware that there can be very serious consequences.

A recent prosecution highlights just how seriously failing to hold insurance is taken in Queensland, when an employer was fined $94,500 and a conviction recorded over its failure to hold workers’ compensation insurance for its workers.

The Workers’ Compensation and Rehabilitation Act 2003 contains provisions around employers failing to hold adequate insurance – all employers must hold workers’ compensation insurance for all workers. An employer has five days of employing workers to obtain a policy and must maintain the insurance by making periodic returns and paying a premium at the time and in the way required for the policy.

Failing to hold workers’ compensation insurance carries a maximum penalty of 275 penalty units (which currently equals $37,908.75) for individuals. If the employer is a corporation the penalty is five times higher ($189,543.75).

WorkCover Queensland can identify an employer failing to insure through a variety of methods. While this may occur on the lodgement of a claim (without a corresponding policy), WorkCover also uses detailed data matching processes to check employer compliance and conducts a state-wide site visit program, where employers are visited to check their insurance coverage.

WorkCover may recover from the employer the amount of the unpaid premium together with a penalty equal to 100% of the unpaid premium. If WorkCover has paid compensation or damages for an injury sustained by a worker when the employer did not hold insurance, it may recover the compensation paid, together with a penalty equal to 50 per cent of this amount.

In 2020-21, WorkCover raised $5.5 million in premiums and penalties against uninsured employers across the scheme.

If further investigations from Workers’ Compensation Regulatory Services (WCRS) find there is sufficient evidence of failing to insure, it may also support a recommendation to the Workers’ Compensation Regulator for a prosecution. In 2020-21, WCRS received four referrals for investigation against employers, two prosecutions were commenced and one of these was successfully prosecuted.

It’s important to note that in addition to a referral to WCRS, WorkCover may also take action to apply a penalty to the employer's account for failing to hold the adequate insurance.

Further information

Visit the workers' compensation prosecutions page for more information.