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Worker definition – new legislation passed in Parliament

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New legislation which changes the definition of a worker for workers’ compensation purposes has been passed in Parliament. This new legislation, which comes into effect on 1 July 2013, aligns the worker definition with the PAYG test applied under Australian Taxation Office (ATO) laws.

The new worker definition

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.

The impacts of these changes

There will be no change for the majority of workers who will continue to be covered for workers’ compensation. The changes may affect who is covered for workers’ compensation particularly in the construction and transport industries, where there are different contracting arrangements.

Examples of individuals no longer covered for workers compensation are those who:

· supply and operate their own plant, such as earthmoving equipment or trucks as part of their contract. (e.g. bob cat, back hoe, prime movers, taxi trucks, cement trucks, tow trucks)

· work mainly / substantially for labour only, quote for the job, provide their tools of trade, rectify defects at their own expense and subcontracts / employs labour

· have a personal services business determination (PSBD) from the ATO.

More information

If you or your workers may be affected by this change, you can:

· Review the information on our website

· Use the ATO employee/contractor decision tool to work out specific contracting arrangements

· When declaring your actual wages for 2012/13 financial year you need to declare wages as per the worker definition up until 30 June 2013. The new change applies only from 1 July 2013, which affects provisional wages declaration for 2013/14 financial year and for workers injured from 1 July onwards.

· Contact your Relationship Manager or call 1300 362 128 to discuss your obligations for workers’ compensation insurance.

· Read the media statement from Attorney General and Minister for Justice Jarrod Bleijie.

Last updated
29 May 2017


Published: 06 Jun 2013
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