Contractors

The term "contractor" covers a wide variety of people in different work circumstances.  It includes consultants, agents, outworkers, and people working under similar arrangements.  These people may operate as sole proprietors, partnerships, companies, or through family trusts.

If you hire such people on a contract, you need to know that they may actually be workers, or deemed to be workers, under some contracts.  Each time you hire a contractor, you need to determine whether he or she is a worker, or deemed to be a worker.

If the person is a worker or deemed to be a worker, you effectively become his or her employer for Work Cover purposes, and you must include the money you pay the person in your total remuneration. If your total remuneration then exceeds $7,500, you must take out a Workers Compensation policy.

There are substantial penalties for not taking out a policy in accordance with the legislation. It is your responsibility to find out whether your contractors are workers or deemed workers and whether you are required to obtain and keep in force a WorkSafe Insurance Policy.

There are often changes to the Accident Compensation Act 1985 and should you be intending to engage a contractor, we encourage you to contact us and speak to one of your team.

As of July 2011 here are some of the important guidelines we have made available for you to download.

WorkSafe General Contractor Guidelines

• General Contractor Provisions - Contractor Deductions

  Description: An individual may be deemed to be a worker of a hirer under the general contractor provisions which are explained under WorkSafe Contractor Guidelines - General contractor provisions and rules for incorporated contractors. This ruling explains when a hirer will be entitled to use a deduction and provides the applicable prescribed deductions for certain professions or trades.  

• General Contractor Provisions and Rules for Incorporated Contractors

Description: The main purpose of the general contractor provisions under section 8 of the Accident Compensation Act 1985 (the Act) is to deem an individual to be the worker of the hirer for WorkSafe purposes where the contractual arrangement is akin to an employment relationship. The rules clarify when an incorporated contractor is required to hold a policy, what is rateable remuneration under that policy and how WorkSafe will handle a compensation claim received from the deemed worker.
 

• General Contractor Provisions – Contracts Mainly for Equipment or Materials

Description: Where the provision of equipment and/or materials by a contractor under a contractual arrangement is the main purpose of that arrangement, the individual that is the contractor, or is engaged by that contractor, will not be a deemed worker of the hirer under the general contractor rules. The general contractor rules are explained under the guideline General contractor provisions and rules
for incorporated contractors. These guidelines explain when the provision of equipment and/or materials is the main purpose of a contractual arrangement.
 

• General Contractor Provisions – Owner Drivers

Description: Under section 7A of the Accident Compensation Act 1985 (the Act), an unincorporated owner driver is deemed to be a worker of their hirer unless WorkSafe determines that the owner driver is carrying on an independent trade or business. These guidelines do not apply to pushbike couriers as WorkSafe considers that such persons are employees of the courier business for which they provide goods transportation services.