The law can be a tricky thing to unfurl. To really help you get your head around things we try to regularly explain some of the fundamentals. Today we’re taking a quick look at compensation law – what it is and how it works.
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The WorkCover government website groups New South Wale’s workers compensation system into four key elements:
1. ‘WorkCover Scheme – provides workers compensation insurance through contracted Scheme Agents to employers operating in New South Wales.
2. SICorp (through the Treasury Managed Fund) – manages workers compensation, administration and financial liability for most public sector employers except those who are self-insurers.
3. self insurers – organisations with enough capital to underwrite, pay and manage their own claims. There are strict criteria that employers must meet prior to WorkCover granting a self-insurers licence.
4. specialised insurers – hold restricted licences to underwrite workers compensation insurance risk for a specific industry or class of business or employers.’
The current system operates through two previous acts, the Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation Act 1998. Both acts are designed to assist and protect employees who have become ill or injured as a result of work activities, as well as employers facing litigation.
Worker Compensation may pay for your hospital and medical costs, along with your regular wages, until the time when you can work again. Your employer must be paying a premium in order for you to be covered. You are not automatically covered by Workers Compensation and not all employees are considered ‘workers’ under the relevant state or territory compensation laws. Prior to commencing any job potential employees should ask if they will be covered in the instance of a work-related injury.
The Government site for WorkCover describes that there are two roles in which it plays in the workers compensation scheme
‘WorkCover acts on behalf of the Nominal Insurer, which is the legal entity responsible for the performance of the WorkCover Scheme. The Nominal Insurer contracts Scheme Agents to deliver case management and policy services within the WorkCover Scheme. WorkCover also regulates and manages the workers compensation system, including the licensing of self and specialised insurers and oversight of service providers.’
Under NSW law, employers must have a workers compensation policy in place if they are paying in excess of $7500 in wages per annum, are employing an apprentice or trainee, or are a part of a group for premium purposes. These are businesses that are related entities paying over $600,000 in wages per annum.
If you require more information about workers compensation you should contact your state or territory’s workers compensation authority.