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Mind your Workers’ Compensation Gap

The rights of ‘gig economy’ workers have been a hot topic in the headlines recently, following five deaths involving food delivery riders in Australia. As they operate as independent contractors, delivery riders are not typically entitled to the same rights as employees, including being covered by their employers’ Workers’ Compensation insurance.

In light of these incidents, the Transport Workers Union is campaigning for stronger protections for gig economy workers and there’s a chance that the federal government may further regulate this insurance and compliance area in the future.[1]

Where do gaps exist?

As a compulsory statutory form of insurance for all employers in Australia, Workers’ Compensation is there to provide financial support in the event that a person is injured or becomes ill due to work. However, this cover does not always extend to independent contractors.

For example, under current law, delivery drivers and riders working for food delivery platforms are considered independent contractors, not employees. As such, they are not eligible for the same level of compensation. While some companies provide private cover, the benefits are not as comprehensive as those available to deemed workers under the statutory Workers’ Compensation scheme.

Next steps

As Australia’s gig economy continues to grow, some forward-thinking companies are already making moves to bridge the divide between employee rights and independent contractor rights.

One example is Menulog. The online food delivery organisation recently announced that it will be moving away from the independent contractor model towards an “employment model”, starting with a pilot programme in Sydney. Part of this involves looking at the existing contracts it has in place with its current pool of couriers and exploring ways to increase current insurance cover and provide other entitlements. Menulog explained that while they are compliant with current regulations, they believe they have a “moral obligation” to go beyond the minimum requirements and do more to support workers’ safety and wellbeing.[2]

How does this impact your business?

As a company that employs contractors, now is an ideal time to take a proactive approach and evaluate your Workers’ Compensation compliance programme. This will allow you to flag any issues that may exist and take steps to close those gaps, so you know that you’re providing the necessary rights and protections for all those who work for you.

If you need to renew your Workers’ Compensation certification, this is the perfect time to make sure your house is in order, as well as ensure you’re prepared for future legal reform around contractor rights, should this happen.

The first step is to understand your current scenario and ask whether your workers fit the definition of an employee or an independent contractor. While the law is clear on Workers’ Compensation compliance requirements around permanent employees, it can get confusing when it comes to the independent service contractors you engage.

The Act requires companies to provide Workers’ Compensation cover to anyone they employ who is deemed a ‘worker’; but knowing who qualifies as a deemed worker can be incredibly challenging, especially when you rely on multiple contractors and sole traders.

For example, depending on where you operate, the definition of a deemed worker could include a contractor who earns 80% of their monthly revenue from your organisation, or a contractor who works on a regular and systematic basis, and reasonably expects to continue as such. Furthermore, Workers’ Compensation Laws differ across states and territories, with diverse regulatory authorities.

To navigate the complexity, avoid potential liability and make sure those who work for you are sufficiently covered, your company must make sure that you are able to correctly classify contractors. If you identify individuals who are not deemed ‘workers’ by law, you must also be able to verify they have their own, adequate Workers’ Compensation cover in place.

If you are not fully confident in your organisation’s current approach, we can assist you.

How iPRO can help

With our expert-driven, automated compliance management solutions, we can work with you to conduct an independent and automated Workers’ Compensation assessment, with the goal of identifying compliance gaps and at-risk contractors.

We can:

  • Verify your contractors’ Workers’ Compensation insurance status for you.
  • Automatically identify at-risk contractors and escalate these cases for review and, if necessary, further assessment.
  • Securely store and monitor all declarations and evidence, so you can easily demonstrate proof of compliance should you be asked to do so by a regulatory authority.

Ready to get started? Let’s chat.