Do you have a valid workers compensation policy?
With Single Touch Payroll now in full effect, the ATO aren’t the only government body who are monitoring your business’s payroll data.
It was Workcover WA who recently audited a family businesses STP declared wage data, in regards to Workers Compensation compliance.
The business employed two minor children of the family group, who worked in the business a few hours per fortnight.
Workcover was able to identify that this business had employees, and didn’t have an active workers compensation policy, through the ATO’s Single Touch Payroll data.
Workcover then issued the business with a $1,200 fine for not having a valid policy,
Your Requirements as an employer
Under the Worker’s Compensation and Injury Management Act 1981, A workers compensation policy must be in place for anyone employed who is defined as a worker. (See the link for further information of the definition)
In some cases, contractors and subcontractors may be defined as workers, depending on the working arrangements.
The only workers who can be excluded from coverage are the directors.
Pay the Premiums on Time.
We also had a case recently where one of our accounting clients required workers compensation which had been in place for a number of years, but coverage lapsed due to unpaid premiums. The client made arrangement to pay the premiums, but due to a misunderstanding that did not occur. The client ignored the Insurance companies reminders thinking the Premiums had been paid, and as a result of the failure to have cover, Workcover WA issued the client with a significant fine. In this case the source of the breach was notified to Workcover WA by the insurance company.
The matter ended up in court where we proved the error was an oversight rather than intentional, however the fine was still significant.
(Source: National Tax & Accountants’ Association Ltd.)