As with all aspects of the business world, COVID-19 has impacted not only on Workers Compensation Insurance but how employers deal with their staff in these current times; when managing claims and wages for example.
It is important to keep you, our clients, informed in this rapidly changing environment. The following article provides updated information on a range of subjects that affect most employers. The information mainly refers to NSW, but further information will be available for other states and territories.
WORKERS COMPENSATION CLAIMS AND COVID-19
- Will my staff be covered if they contract COVID-19?
- Psychological claims from being stood down.
- Psychological claims from potential exposure.
- Working from home.
- Workers refusal to attend work due to fear of contraction.
Will my staff be covered by COVID?
In NSW, a virus (like COVID-19) may be considered under the disease provisions of the Workers Compensation Act 1987 (1987 Act).
In some circumstances coronavirus (COVID-19) may be a compensable workplace injury. To be compensable, work activities must be proven to be the main contributing factor to contracting the virus. Due to the nature of viruses, it may be difficult to determine that employment was the main contributing factor. Each claim will be assessed on its individual merits.
Consideration may be given to (but not limited to):
- work related travel to an area with a known viral outbreak
- work related activities that include engagement or interaction with people who have contracted the virus
A claim can be submitted only if there is a confirmed diagnosable injury where employment was the main contributing factor in contracting the disease. Quarantine periods after a suspected exposed event may not be covered.
Support and guidance are available through official government channels on preparing your workplace and travelling employees:
- World Health Organisation
- NSW Health
- Department of Home Affairs for overseas Travel
- Smart Traveler – Guidance on destinations
Psychological claims from being stood down
It is likely that this claim would not be covered. Compensation for a psychological injury is not payable if the injury arose from reasonable actions taken by the employer. However, each claim will be assessed on a case by case basis by the insurer.
Psychological claims from a potential exposure and requiring 14 days quarantine.
An injury will firstly need to be identified, if the worker has not contracted the virus then an injury has not been established for a compensable claim. If a mental injury has arisen out of being stood down for quarantine, then this will need to be assessed on a case-by-case situation.
Working from home
Employers have a responsibility under the Work Health and Safety Act 2011 to ensure workers have a safe environment to work in, whether it be at their usual location, at home or in locations away from their normal workplace.
Injuries sustained whilst working away from their usual workplace, such as from home maybe a compensable injury if the injury sustained was arising out of, or in the course of employment and that their work was a substantial contributing factor.
Employers should encourage workers to create a safe work environment whilst working remotely – this includes making sure that the work location is appropriate ergonomically, and in an area free of trip hazards and with adequate lighting. Employers also need to encourage workers to take extra care for their personal safety whilst at home, just as they would in their normal workplace.
What if a worker does not want to go to work because they are worried about contracting COVID-19?
You should speak to your employee about any concerns they have about attending work in the first instance. You should advise what plans are in place to reduce risk in your workplace or advise of any special arrangements that are also in place.
The legislation requires that injured workers make reasonable efforts to return to work. If a claims service provider does not believe a worker is making reasonable efforts, it may take steps to suspend a worker’s weekly payments. What constitutes an unreasonable refusal to return to work will depend on the circumstances.
Changes in Certification of Capacity
In response to COVID-19, amendments have been made to the Workers Compensation Regulation 2016 to allow treating physiotherapists and psychologists to provide medical certification of an injured person’s ability to work.
A general practitioner must issue the initial certificate of capacity to an injured worker so that the person’s full health needs can be assessed.
Thereafter, the treating physiotherapist or psychologist can issue subsequent certificates to an injured person if the injury relates to their area of expertise.
This amendment has been made with the view of relieving the pressure on general practitioners and the overall health system and will be in place for 12 months, unless repealed earlier.
JOBKEEPER IMPACT ON PREMIUMS AND CLAIMS
- Is the Government’s Job Keeper allowance to be declared as wages?
- Premium impact of Job Keeper allowance.
- What if I have an injured worker who receives compensation and will be entitled to job keeper?
Is the Governments Job Keeper allowance to be declared as wages?
The State Insurance Regulatory Authority for NSW released the guideline on Job Keeper Payments on the 29/04/2020. These payments are designed to support businesses and keep Australians in jobs with around 6 million workers expected to receive $1,500 (before tax) fortnightly, via their employer.
- The Job Keeper payments will be declared as wages if it forms part of your workers’ wages while they continue working for you.
- The Job Keeper payment will not be declared as wages, if they are not working while in receipt of this payment.
The regulator has made the decision, based on the premise that workers who continue to perform work will be at risk in sustaining a work-related injury compensable under the Workers Compensation System.
Premium impact of Job Keeper allowance
Workers Compensation premiums are calculated utilising an employer’s annual wage roll.
Therefore, under the current legislation, employers can anticipate paying workers compensation premium on any Job Keeper payments for workers who continue to work while in receipt of the payment.
For employers who have reduced their staffing or completely shut down, these payments will NOT form part of your annual wage roll.
Affida recommends that businesses identify how to track these payments separately so that the potential premium impact can be identified by Affida.
What if I have an injured worker who receives compensation and will be entitled to job keeper?
The State Insurance Regulatory Authority has determined that the job keeper payments will be classified as earnings for the purpose of weekly compensation payments and the calculations of your workers pre-injury average weekly earnings.
If your worker has sustained an injury after Job Keeper payments are made, these payments will be considered earnings in calculating their pre-injury average weekly earnings.
If your worker is currently in receipt of weekly workers compensation payments, the Job Keeper payments will be classified as earnings before any make-up pay is provided.
How does the Job Keeper payment affect weekly compensation payments?
Scenario 1: If your worker is currently entitled to $1,000 per week in compensation and is totally unfit, the Job keeper payment will make up $750 and a claim of $250 from your insurer can be made.
Scenario 2: If your worker is entitled to $1,000 per week and is currently working and on partial capacity allowing them to work up to $450 per week, the Job Keeper payment of $750 will push their earnings to $1,200 therefore no claim can be made for that week of compensation.
PREMIUMS AND FINANCIAL HARDSHIP DUE TO COVID-19
- How does reduced staff or shutdowns affect your policy and premium?
- Premiums during financial hardship.
- Unconscionable premium increases.
How does reduced staff or shutdowns affect your policy and premium?
Premium reductions can be obtained by re-estimating your wages until the end of your current renewal term if your business has been disrupted by the current climate.
If you have paid your premiums in full for the year and have now experienced a reduction in your estimated wages, a partial refund on the unused portion of your premiums can be provided.
For businesses that have shut down completely, iCare will be able to place the policy on hold until circumstances changes.
Premiums during financial hardship
An additional 3 months to pay your premiums for the current insurance term can be obtained and, in extenuating circumstances, premium payments can be deferred for up to six months for businesses experiencing hardship.
Unconscionable premium increases
If a premium increases dramatically and as result causes severe financial hardship on the business, there may be avenues for appeal to iCare. The circumstances need to be extenuating and the scope for these appeals are quite narrow. Circumstances such as the impact of a one-off claim, claims that have been incorrectly accepted or their management have led to premium increases are all issues that could be cause for an appeal.
If you have any questions in relation to the topics outlined in this article, please contact your Account Manger, or call our Affida Workers Compensation division on 02 9122 9901.
The information contained on this website is general in nature and has been prepared without taking into account your objectives, financial situation or needs. Before acting on any advice consider whether or not it is appropriate. Consider the disclosure documents, which includes our Financial Services Guide (FSG) and Product Disclosure Statements (PDS) for some products.