Understanding who is and isn't your worker

Why this information is important

This information is important to any business owner who employs someone as it affects their WorkCover requirements. If you're a business owner who employs, hires, or otherwise engages with someone who is considered a worker, you'll need to register for WorkCover insurance. How much remuneration you pay will also affect your premium.

Who is my worker for WorkCover premium and self-insurance contribution purposes

Your worker includes your employee and can include a contractor or subcontractor hired by you.

Employees

If you've hired an individual, the legal rights and obligations arising from the contract (that is, the terms of the contract) between the parties determine if they are an employee or a contractor or subcontractor. The agreement or contract can be wholly written, wholly oral or any combination of written terms, oral terms and terms implied from conduct.

The following are always treated as employees:

• apprentices
• trainees
• labourers
• trades assistants.

To check if an individual is your employee or a contractor or subcontractor, you need to review the whole working arrangement.

Contractors or subcontractors

Your worker may also include a contractor or subcontractor who completes work for you, where that person is:

• a sole trader
• a member of a partnership
• a member, director, shareholder or employee of a company
• a trustee, beneficiary or employee of a trust.

Directors

If you operate your business as a company or trust with a corporate trustee, it is likely you are a director of that business. If so, then you are officially classed as an office holder. In other words you’ve been appointed to a position by your company but don’t have an employment contract relating to that appointment.

However, you may count as a director and employee of your company if, for example, you’re employed under a service contract by the company, the terms of which make you an employee.

If you are a director and unsure if you also count as an employee, then you should obtain your own legal advice.

Whether or not a director counts as an employee, any directors fees paid or payable to a director must be included as remuneration for WorkCover insurance purposes.

Exceptions

Contractors or subcontractors that are part of an independent business

If you hire an independent business and they provide a contractor or subcontractor to complete work for you, then they or anybody who works for that business would not be your worker. An easy way of figuring this out is to ask yourself:

• Do I have the legal right to control not only the result of the work, but also what and how the work will be done?
• Does the contractor's or subcontractor's business depend on me for its existence?

If you answered no to both of these questions, then they would not be considered your worker.

Labour hire arrangements

A labour hire arrangement is when you contract with an employment agency, which then contracts with someone looking for work, in order to provide you with a worker.

In this arrangement, you're a client of the employment agency and so the person working for you would not be your worker.

For more information on labour hire arrangements:

Unpaid work arrangements

Unpaid work can take place in the workforce in different ways – from vocational placements to unpaid job placements, internships, work experience, and trials. Some of the reasons you may have an unpaid work arrangement at your workplace could be to:

• give someone experience in a job or industry
• provide training, skills, and/or work experience as part of formal programs to assist people to find work
• test someone's job skills
• let someone volunteer their time and effort if you run a non-profit organisation.

If someone is working with or for you in an unpaid work arrangement, then they would not be your worker.

Sporting contestants

A sporting contestant is someone who:

• participates as a contestant in a sport or athletic activity
• trains or prepares to participate in a sporting or athletic activity as a contestant
• travels between a place of residence and the place where they participate as a contestant.

In this situation, a sporting contestant would not be your worker.

However, special rules apply if someone is:

• engaged to participate as a rider in a horse race conducted as part of a race meeting, or official trial, held under the Rules of Racing
• a jockey or an apprentice jockey who holds a licence granted in accordance with the Rules of Racing and who agrees to do ride work for a trainer licensed under the Rules of Racing.