Workers Compensation Act changes to benefit private-sector employees

To provide a fair and equal distribution of workers compensation expenses across all ACT private-sector employers, the ACT Minister for Industrial Relations, Katy Gallagher, announced a series of changes to the ACT Workers Compensation Act 1951 and the Default Insurance Fund.

The changes, to come into effect from 1 July, include:

• A new requirement for insurers to disclose the Default Insurance Fund levy on premium notices;
• Clarification of the broad definition of a ‘worker’ for workers compensation purposes; and
• A requirement that the ACT Wages and Earnings Guide be used for working out total wages for the purposes of premium calculations under the Act.

“The protection of workers is not optional. However, an increasing number of individual labourers and tradespeople with an Australian business number [ABN] have become a vehicle for contractors further up the chain to avoid paying workers compensation insurance," Gallagher said. “These changes to the Act clarify the broad definition of a ‘worker', thereby limiting the opportunity to avoid paying workers compensation premiums and engage in sham contracting.

“Too often, the ACT Default Insurance Fund (DI Fund) was left to cover the compensation costs of uninsured workers when businesses did the wrong thing and failed to take out workers compensation insurance.

“The DI Fund provides a safety net to injured workers who are left without compensation through the actions of their employer. But the cost of providing this fund is met by every ACT employer who pays a levy when they obtain a compulsory workers compensation insurance policy.

“From 1 July, insurers will be required to disclose the DI Fund levy amount on every premium notice. This will allow every employer who does the right thing to see the true cost of non-compliance in the community.

“Through community awareness and action, those employers who avoid their workers compensation responsibilities will be held to account.

“In late 2009, we introduced a revised compliance framework. Employers who do not meet their workers compensation obligations can be fined up to double the avoided premium. This helps disprove the perception that non-compliance is a cheaper alternative to the cost of protecting workers in the event of a workplace injury.

“Reporting fraud and non-compliance to WorkSafe ACT, helps to provide fairer workers compensation costs for all ACT private-sector employers.”

ACT and Region Chamber of Commerce and Industry Chief Executive Chris Peters supports the changes to the legislation, stating: “The Chamber welcomes these changes to the ACT legislation. It supports employers who are doing the right thing and is aimed at penalising employers who flout the law. The legislation simplifies the administration required and reduces the costs of compliance borne by business.”