Workers Compensation is essentially another tax, or at least a financial burden on small business.
For those in the construction industry, Workers Compensation is especially burdensome due to the high rates/premiums charged (it is not so much an issue for office/sales/retail industries).
The big area of focus under a WorkCover audit is the issue of whether or not contractors are considered employees for Workers Compensation purposes. Common factors that will assist in substantiating that they are indeed independent contractors running their own business include:
- Contractors operating under a company structure with their own Workers Compensation policy;
- Sole traders/partnerships but with their own Workers Compensation policy;
- If the contractor provides equipment for hire rather than labour;
- Being provided with a written quote by the contractor;
- The contractor publicly advertising their services;
- The contractor being registered for GST; and
- Contractor invoices are not consecutively numbered.
If you have any queries relating to this issue please feel free to contact our office at any time on 02 4268 0070.