The Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) contains rules for when an individual contractor, or a member of an incorporated contractor’s personnel, is your “worker” under the WorkCover scheme. This is designed to ensure WorkCover benefits are available to as many people as possible that provide personal services, and to ensure that the WorkCover is taken out by the effective entity procuring the worker’s services.
An individual may be your worker for WorkCover purposes if you engage an individual or incorporated contractor and:
- the contractor is engaged mainly to provide services;
- at least 80% of those services are provided by the same individual; and
- at least 80% of the contractor’s relevant income in a financial year comes from the engagement.
If all three of these elements are satisfied then you may need to include the fees paid to that contractor in your WorkCover premium calculations, even if the contractor is a body corporate such as an incorporated association or company, and the worker is an employee of that company. You will also need to recognise any WorkCover claims by the relevant worker for WorkCover purposes for relevant work-related injuries.
There are exceptions to the above rules. For example, the Act contains exclusions for independent contractor arrangements relating to owner/drivers and sporting contestants.