Workers Compensation for Residential Builders in Queensland

What it is

WorkCover Queensland is the statutory insurer that runs the Queensland workers compensation scheme under the Workers Compensation and Rehabilitation Act 2003 (Qld). Every Queensland employer that engages workers must hold a current WorkCover Accident Insurance Policy unless granted self-insurer status, which is rarely available to small residential builders.

The policy covers wages, medical expenses, rehabilitation costs and lump sums for workers injured at work or who contract a work-related illness.

Who must hold a policy

A residential builder must hold a WorkCover Accident Insurance Policy if it engages any worker as defined in the Act. There is no remuneration threshold. The Queensland scheme is broader on this point than some other states.

The Act defines a worker as a person who works under a contract and is, in relation to that work, an employee for the purposes of the assessment of PAYG withholding. Apprentices, trainees and most labour-only subcontractors fall inside that definition.

A self-employed sole trader who does not engage workers does not need a WorkCover policy for their own work. Personal injury and income protection insurance is the only way for that sole trader to be covered for an injury.

How to obtain a policy

To apply for an Accident Insurance Policy:

• Submit an application through WorkCover Queensland online services or by phone on 1300 362 128
• Provide business details including the ABN, business structure, anticipated wages and trade classification
• Receive a policy number and pay the first premium instalment

WorkCover contacts the employer each July for policy renewal. The annual declaration of wages is due by 31 August each year for the prior policy period ending 30 June.

How premiums are calculated

WorkCover Queensland sets premiums based on:

Industry rate

Each business is assigned a WIC (WorkCover Industry Classification) code matched to the dominant work performed. Residential builders typically sit under the construction codes, with subdivisions for house construction, alterations, additions and specialist trades. Industry rates are published annually in the QLD Government Gazette.

Wages declared

Gross wages plus super plus allowances plus deemed wages from contractors. The total is multiplied by the industry rate to produce the base premium.

Experience adjustment

Where claims costs exceed the industry baseline, an experience-rated loading is applied. Employers with very low claims attract a discount. The adjustment uses three years of claims data.

Apprentice exemption

QLD removes apprentice wages from the premium calculation provided the apprentice is registered with the Department of Employment, Small Business and Training. This is one of the more generous apprentice settings nationally.

Contractor inclusion

The trickiest area for residential builders is whether subcontractor payments count as wages. WorkCover Queensland publishes a worker determination tool that runs through a series of factors including:

• Who has the right to control how the work is done
• Whether the contractor can delegate
• Who supplies tools and equipment
• The basis of payment (hourly vs fixed price)
• Whether the contractor runs an independent business
• Risk and reward of the work

Contractors deemed to be workers under that test have their labour payments included in declared wages.

Claims process

When a worker is injured the builder must:

• Provide immediate first aid
• Notify WorkCover within 8 business days of becoming aware of a claim
• Cooperate with the suitable duties planning process
• Pay any excess specified in the policy (the QLD scheme has no employer excess on weekly compensation, unlike Victoria)

The worker submits a claim form to WorkCover Queensland directly. WorkCover decides whether to accept the claim and pays the worker. The builder does not pay weekly compensation out of pocket in QLD, which differs from the Victorian model.

Penalties for non-cover

Operating without a current Accident Insurance Policy carries serious penalties under the Workers Compensation and Rehabilitation Act 2003. The maximum penalty for failing to insure is more than 67,000 dollars for an individual and more than 335,000 dollars for a body corporate. The builder is also personally liable for any claim that arises during the uninsured period plus a penalty premium back to the start of the gap.

Practical points for residential builders

Run a WIC check at policy renewal each July. WorkCover periodically restructures codes and a wrong code can shift the rate by 20 to 40 per cent. Declare wages accurately at the August deadline because under-declaration leads to a corrected assessment with interest. Treat the contractor question seriously. A labour-only carpenter or roofer paid by the hour usually pulls into your premium. Holding an ABN does not exclude them on its own.