From 1 July 2013, the definition of a ‘worker’ for the purposes of the workers’ compensation legislation in Queensland has been narrowed which means that fewer independent contractors will be required to be covered under a principal’s (eg employer’s) workers’ compensation policy. The changes will affect all industries, however the largest impact is likely for contractors in the construction and transport industries who previously were required to be covered.

The new definition of a “worker” now includes:

(a) A person who works under a contract; AND
(b) In relation to that work, is an employee for the purposes of assessment for PAYG withholding under the Taxation Administration Act 1953 (Cth).

The change means that business owners will only be required to include an individual contractor under their workers’ compensation policy if the contractor works under a contract and is an employee for PAYG taxation purposes.

We understand that Workcover Queensland will be using the ATO tools to determine who is a worker for worker’s compensation purposes. The main tool which is available on the ATO website is the “Employee/Contractor Decision Tool” which can be located at:

Workcover Queensland encourages employers to use the tool and then print and keep a copy of the ATO determination on file for future reference. This tool will be a very good indication as to whether or not the individual contractor needs to be covered for Workcover in Queensland.