Workers Insurance provides an employer coverage in the event one of their employees suffers a workplace injury or illness. It provides compensation to the impacted employee as well as other benefits such as medical and hospital expenses, rehabilitation, personal items if damaged, and in the event of permanent impairment or death a lump sum payment.
Workers insurance is compulsory in NSW unless you are an exempt employer. Exempt employers are not required to get an insurance policy if :
- Annual wages are $7500 or less
- You do not employ an apprentice or trainee and
- You are not a member of a group for premium purposes
Even if you are exempt you are obligated to assist with injury management and return to work processes. Not having a policy when you are legally obliged to, will see you fined up to $55,000 and/or 6 months jail time.
In NSW, Workers Compensation Insurance is largely decentralised which means you don’t go through one Government Body to manage your insurance – rather you can organise this through one of three organisations:
Premiums are calculated on the total wages paid by your company multiplied by your industry rate or CPR (claims performance rate) which takes into account the risk of the industry in which you operate.
Small employers can benefit by being a member of an industry group – this can lower your premium as they are calculated across the group’s average performance.
Medium to large employers have their premiums rated based on their own CPR experience – the more claims, the higher your premiums.
If you operate a business in NSW and need assistance in establishing your workers insurance or in calculating your total wages, please reach out to your Evolve bookkeeper for assistance.