Workers compensation insurance protects your business when a worker is injured. But what happens when you use contractors?
If you engage contractors (who in turn may engage subcontractors), you could be carrying a huge financial risk with workers compensation.
A contractor may still be your ‘worker’
Under some circumstances, contractors and subcontractors are defined as workers under WA’s workers compensation and injury scheme. This can include people with an ABN who issue you an invoice.
If someone meets the legal definition of a worker, the fact that you call them a contractor doesn’t make any difference. You must include their pay in your workers compensation policy.
Get it wrong and suffer financially
Here's what you can expect to pay when someone injured at work is legally a worker and you haven’t insured them.
- All their compensation entitlements
- A fine of up to $10,000 per worker
- Any premiums you avoided for the past five years
One misclassified contractor could cost you hundreds of thousands of dollars.
You can’t force someone to be a contractor
Trying to avoid premiums by pushing workers to become contractors is illegal.
If you do, you can be fined up to $5000 per worker and still be fully liable if they’re injured.
Protect your business - get a free insurance review
MPA Insurance can review your workers compensation arrangements and help you avoid costly mistakes.
They are eager to assist, so contact them on 0439 135 088 or insurance@mpawa.asn.au.
Your money. Your choice.
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