WorkSafe selected the bricklaying, plastering and carpeting and tiling industries, largely because of their poor claims performance and focused on employers with remuneration of less than $300,000.
Of the 557 employers offered the amnesty period, 188 employers took the opportunity to voluntarily disclose. The non-compliance declared through the amnesty equated to $241k in past premiums – an average of $1,282 each in premium per employer.
Of the remaining 369 employers selected, 309 reviews have been completed to date, which has generated $471k in adjusted premium – an average of $1524 each in premium per employer.
Of the reviews completed, non-compliance was detected in more than 52 per cent of reviews conducted.
WorkSafe has now commenced a second wave of contractor reviews, focussing on employers in the carpentry industry. 350 employers have been selected for review and were offered an amnesty period between 1 September and 31 October, 2017.
The Premium Compliance branch is in the process of reviewing the amnesty disclosures and commencing reviews on those employers who did not take advantage of the amnesty.
Given the initial project recouped more than $700k in WorkCover premium that should have been paid, it is highly likely that WorkSafe will broaden their future audits to businesses with annual remuneration higher than $300k in future.
In addition to the amnesty and audit, WorkSafe also undertook an exercise to review uninsured employers and were able to identify 107 uninsured employers, which led to the billing of approximately $607k in premium and penalties.
In 2017/18, the Premium Compliance branch will again have a focus on identifying uninsured employers and will be using three main methods to support the program:
• Matching ATO and WorkSafe data to identify potential uninsured employers
• Looking at WorkSafe registrations where there is a claim and the registration had a short duration of coverage
• Using business and job advertisement websites, links from other compliance activities and identifying businesses through street walks.
WorkSafe has realised that from their recent amnesty and auditing that the number of trades that are likely to have subcontractors engaged that would be deemed workers is much greater than they have found thus far, and it is highly likely that they will now focus on other construction trades and continue their data matching.
The WorkSafe scheme is made up of premium contributions by all employers that register for WorkCover insurance in Victoria. The liabilities of the scheme are assessed actuarially so as to ensure that the premium collected can meet the future liabilities of the scheme.
If employers who are legally obligated to pay WorkCover insurance do not contribute the right amounts to the scheme then the cost burden is shifted onto those employers that do.
Additionally, employers that do not have a WorkCover insurance policy can be sued for the costs of a claim lodged against their business plus back pay on premiums for the previous four years and penalties.
Master Builders does not want to see its members exposed to this type of action from WorkSafe.
The average WorkCover premium for construction businesses in Victoria is around 2.5 per cent of employers annual remuneration (including deemed contractor remuneration), with bricklayers and concreter paying around 6 per cent. The amount of premium payable is reflective of the claims experience and risk in the individual industry sectors. Whilst the dollars payable may not be insignificant, especially for small businesses, the amount of coverage that a WorkCover insurance policy provides is also not insignificant as it potentially covers all legal, medical and common law liabilities for an injured employee.
The scheme protects employers and injured workers.
For further advice on WorkCover obligations for subcontractors contact the OHS Unit on (03) 9411 4569.
Credit: Master Builders Association Victoria (11/12/2017)