If you’ve reached the point where your business is employing others, you need to have all the boxes ticked when it comes to workers’ compensation.
What Exactly is Workers’ Compensation?
A worker who suffers an injury on the job and is then unable to earn an income is in a parlous position. Over the last century, many nations have developed workers’ compensation schemes. These avoid both workers and their dependents starving and prevent (or minimise) draining legal battles between employers and their injured employees.
How the System Works
There is a handful of exemptions, but if you’re running a business that hires workers on a regular, casual or contract basis and your annual wages bill comes to more than a few thousand dollars, you need to have arranged the following two things.
1. A workers’ compensation insurance policy: This policy, purchased from a licensed insurer, is non-negotiable. The cost of the policy will vary depending on factors such as how dangerous the industry is that your business belongs to.
2. A safe workplace: Your most important responsibility as a business owner is providing a workplace that is as risk-free as possible. This involves establishing safe work procedures; training workers to follow those procedures; warning them about potential hazards; and providing protective equipment. Be aware that you can be held responsible for your workers’ mental as well as their physical health. A growing number of workers’ compensation claims are made for workplace stress.
What Happens if a Worker Makes a Claim?
First off, don’t panic. If the worker in question needs urgent medical treatment, making sure they get it should be your priority. Next, take necessary action to avoid any further injury occurring in the workplace. Then document what has happened and get in touch with your insurer in a timely fashion.
In the normal course of events, your insurance company will then ensure the worker is not out of pocket by covering their wages and medical expenses while they are off work. If the worker isn’t going to be able to return to work, they will most likely receive a permanent impairment lump sum payment from the insurance company. In cases of less severe injury, you will need to be involved in devising a ‘return to work’ plan which allows the worker to ease back into their old role as their condition improves.
Safe Work Australia has more information about workers’ compensation and the individual state laws.
One last fact you need to know about workers’ compensation – it doesn’t cover business owners. It’s wise to make sure you have appropriate income protection or total and permanent disability cover.
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.