Workcover.

WORKERS COMPENSATION AUDITS

The Minister for Industrial Relations Mr John Della Bosca in a recent press release stated recently that WorkCovers Compliance branch had issued approximately 12,000 requests for wages audits to Insurers. As a result of these audits approximately $21 million in additional premium had been identified together with $5 million in late payment fees. In the first half of 2003/4 almost $13 million in additional premium had been identified.

In almost every case the employer had received a substantial penalty from their workers compensation insurer over a “Deemed Worker” or “Directors Fees” issue in spite of the employer following their Accountants advice.

With the greater bulk of penalties in the $20,000 to $60,000 range the fallout from the incorrect advice can be devastating to a small business.

AUDIT HELP

For many employers their accountant is their only source of information and guidance on these issues. It is clear from the cases dealt with that many accountants just do not have a comprehensive understanding of the issues and the potential penalties involved if they get it wrong to be able to advise their clients correctly.

Workers Compensation Auditors are highly skilled in identifying problem areas of a small business operation and the issues of Deemed worker and Directors fees are regularly targeted and have provided the WorkCover run compensation scheme with a cash bonanza in penalties from unsuspecting small business employers who felt they were running their business correctly

YOU ARE RESPONSIBLE

The bottom line is the employer is responsible for the penalty for “non compliance” irrespective of whether the employer knew or even understood the rules. The highest fine we have dealt with has been in excess of $200,000, it can only be a matter of time before an adversely affected employer takes their accountant and his professional indemnity insurance policy to task over incorrect advice at a Workers Compensation audit.

CONTRACTOR STATUS

How a contractor’s status is determined during an audit is based on a list of criteria outlined in the wages definition manual – Oct 2003. Page 31 outlines the list of criteria that auditors use to define whether your contractor was a worker. It’s in your interest to make sure that your contractor complies with all these indicators to avoid a hefty penalty. This list can be open to interpretation so it’s important you understand just what your auditor is looking for, we’re here to help.

So how do you get the right advice?

Talk to us - we have travelled down this road. We can explain things simply, helping you to understand the auditing process. We provide support, information and mediation before, during and after your workers compensation audit.

Please Take the time to browse our web site . If we can be of assistance please Contact Us
Testimonial
Just having you there to talk to was a massive relief. The real benefit of our association however came when you took the project over for us and took control of the entire process – literally! Over a period of time, you were able to collate all our information into a usable format to be provided to the auditors, you sat through the audit process with me, fought “tooth and nail” for what you believed was the right outcome for our business and in the end achieved a result that we feel is tremendous given the situation we would have been facing had we had to face this on our own. Just the fact that you were able to take the project on allowed me to concentrate on my own business. Once again, I would like to thank you for everything that you have done for us. I would recommend you and your services to anyone facing similar issues. We could not have got through this without you June.
Sincerely
Terry R
Copyright 2007 Contractor Clarity Pty Ltd