Workers compensation: Are your cross-border workers covered?

By Jordan Langford (for website blog: Click here)

If your business is located in New South Wales and you have workers based in other states and territories, there are some key factors you need to consider in order to ensure they are covered when it comes to workers compensation insurance.

Under the Workers Compensation Act 1987 (NSW), you are responsible for ensuring your workers are covered by workers compensation insurance. It doesn’t matter whether they are working in New South Wales or somewhere else, they must be covered.

Worker or contractor

The first thing you should consider is whether a worker is an employee of your business, as the Workers Compensation Act only requires you to provide workers compensation cover to employees. In the case of contractors, it is the contractor’s responsibility to obtain appropriate cover.

Cross-border workers

Next, consider how long your workers will be working outside New South Wales.

If the cross-border appointment is for six months or less, then the worker will be covered under your New South Wales workers compensation policy. However, if the term of their cross-border appointment is for more than six months, they will be deemed to be a cross-border worker and may not be covered. In this case, you’ll need to determine their state of connection.

State of connection

To work out whether a cross-border worker’s employment is connected with New South Wales, you need to refer to the ‘state of connection’ test, which is comprised of a series of hierarchical questions. To apply the test, it’s simply a case of answering the questions posed in order. If you can’t answer a question, then move on to the next and so on until you have a clear answer.

• Test A – Where does the worker usually work?
• Test B – Where is the worker usually based?
• Test C – Where is the employer’s principal place of business located?
• Test D – In the case of a worker who works on a ship, where is the ship registered?
• Test E – Where was the worker when they sustained the injury?

Let’s look at an example.

A worker who is employed by a business located in New South Wales decides to permanently relocate to Queensland. The business continues to employ her as she is able to carry out her duties on a remote basis. Because the worker is now permanently working in Queensland, Test A applies; i.e. her state of connection is Queensland. The business will need to take out workers compensation insurance in that state because she is not covered by their New South Wales policy.

Overseas workers

If you send a New South Wales based worker overseas for less than six months, they will likely be covered under your workers compensation policy for the duration of the placement. However, be sure to also check your insurance obligations in the jurisdiction they are working in.

If the length of the placement is more than six months or is expected to become a permanent placement, you should seek workers compensation insurance in that jurisdiction.

Ask for advice

At Emjay Insurance Brokers, we understand the ins and outs of workers compensation insurance and can help you ensure all your workers are appropriately covered. We’ll work closely with you to craft a tailored insurance solution that will meet your needs and empower you to embrace risk.  Should you require further information, and wish to discuss your needs please contact us on (02) 9796 0400.