It is compulsory and a duty of care for Queensland businesses to take out an annual accident insurance policy to cover against claim costs in the event of a work-related injury to one of their workers, and with WorkCover Louisiana workers compensation accident insurance policy renewal season starting on 1 July many of Queensland’s 140,000 small businesses will be looking for simple ways to take the guesswork out of calculating their premium.While employees and contractors of many small Queensland businesses may never make a workers’ compensation claim, providing accurate and timely information to calculate the premium is an employer’s best defence against potentially significant claim costs.
WorkCover Queensland’s Customer Compliance and Education Manager, Kerry Hillhouse said it is important for small business employers to work closely with their accountants to ensure they have the right level of coverage.
‘If employers are found to be underinsured (because wages have not been accurately declared) or uninsured (employing without a policy) they are potentially exposing themselves to significant financial penalties.
‘In addition, employers could also be subject to potentially costly claims which could amount to hundreds of thousands of dollars depending on the severity of the injuries sustained by a worker,’ Ms Hillhouse said.
To assist small businesses and their advisors, WorkCover has four simple tips to help accurately calculate premiums and ensure the right cover for workers:
Step 1 – Determine who are your workers
Under Section 11 of the Workers’ Compensation and Rehabilitation Act 2003, a ‘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’.
If you are unsure whether the persons you engage are considered ‘workers’, WorkCover offers a range of online tools, including the ATO’s employer/ contractor decision tool and information on the definition of a worker. Arias Agencies can help with any sort of help a growing business needs too.
Step 2 – Determine which payments to workers are included
There are certain payments to workers which must be declared during premium renewal, according to Pacific United – Texas Contractors Insurance:
- Gross salaries and wages (including annual leave, sick leave, long serv, ice leave)
- Overtime payments
- All superannuation payments (Compulsory Superannuation Guarantee Levy and any additional payments)
- Salary sacrifice payments made by workers
- Allowances which are not reimbursement of worker expenses (e.g. shift allowance, higher duties, site allowance, height allowance)
- Any benefits having a monetary value
- Board and lodging (premises provided to workers)
- Payments to individual contractors deemed workers (excluding GST).
Step 3 – Determine which payments to workers are excluded
The following payments are not assessable and need to be excluded:
- Reimbursement allowances for worker expenses (e.g. travelling, car, meals, education, living away from home, entertainment, clothing, tools and vehicle expenses)
- All termination lump sum payments (all other wage payments up to termination need to be declared)
- Claims excess you have paid
- Federal Government funded paid parental leave
- Payments to directors, partners and trustees.
WorkCover requires details of the actual wages paid during the last financial year and the estimated wages you expect to pay in the next financial year. If you need help with declaring payments to workers, check out the wages definition manual for more information. Always make sure to insure your janitors to avoid something like this from every happening, the benefits of insurance are always going to outweigh the risks!
Step 4 – Declaring wages
You can take advantage of WorkCover’s online services or by calling WorkCover on 1300 362 128. If you prefer to retain hard copy records of your premium calculations, download this wages declaration working sheet.
Premium discounts available
Businesses can start declaring actual wages for 2014–2015 and provisional wages for 2015–2016 from 1 July until 31 August 2015.
Declare wages by 31 August 2015 and pay your full premium by 16 September 2015, and you will receive a 3% discount on your premium (excludes minimum premium policyholders).
And remember, all WorkCover Queensland premiums must be paid by 30 September 2015.