Do You Need to Cover Contractors and Subcontractors Under Workers' Compensation in WA?

If your business operates in Western Australia and you engage contractors or subcontractors, you might be asking:

"Do I need to include them on my workers' compensation policy?"

It’s a great question — and one that catches many businesses off guard.

The short answer? Often not, although it depends if they are considered a ‘worker’. Let’s break it down:

What the Law Says in WA

Under the Workers’ Compensation and Injury Management Act 1981 (WA), any person who works under a contract of service or apprenticeship may be considered a ‘worker’ — and must be covered by workers' compensation.

This includes some contractors and subcontractors, even if they have their own ABN, operate as a business, or invoice you. Just because someone calls themselves a contractor doesn’t mean they aren’t a ‘worker’ under WA law.

When is a Contractor Considered a ‘Worker’?

A contractor or subcontractor could be classed as a ‘worker’ if:

• They work mainly or solely for your business

• They don’t delegate or subcontract their work to others

• They use your tools, equipment, or materials

• You control how, when, and where they work

• You have the capacity to terminate their employment

• They are paid on an hourly or daily rate (salary or wages)

• They work set hours of work

• They don’t carry their own workers comp insurance

If the relationship looks, feels, and functions like employment — they should likely be treated as workers for insurance purposes.

Real Risk: No Cover = Big Consequences

If a subcontractor is injured, and WorkCover WA determines they were effectively your worker:

• You could be personally liable for the claim

• You may face fines or prosecution for failing to hold the correct cover

• Your public liability may not respond to the injury (because it falls under workers’ comp legislation)

What If the Contractor Has Their Own Workers' Comp Policy?

Great! Always ask and collect:

• A current Certificate of Currency for their workers compensation policy

• Confirmation that they’re aware of and managing their own workers (if they use subcontractors)

If they don't have their own cover — and meet the “worker” definition — the onus likely falls on you to insure them.

Industries Commonly Affected

• Construction & trades (plumbing, electrical, carpentry)

• Cleaning & facilities services

• IT and consulting services

• Transport / deliveries / logistics subcontracting

• Labour hire or casual service businesses

In many of these industries, subcontractors are engaged regularly — but may still fall under your workers’ comp obligations.

What Should You Do?

Steps to Protect Your Business:

1. Review your contractor relationships regularly

2. Ask: Do they meet the legal definition of a ‘worker’?

3. Request Certificates of Currency from all contractors

4. If in doubt — include their payments in your wage declaration

5. Talk to your broker — we’ll help you assess and declare appropriately

Just because someone works under an ABN doesn’t mean you’re off the hook. In WA, if a contractor is effectively working like an employee, they might be considered your responsibility under workers’ compensation law — and that means you must include them on your policy and cover their payments as remuneration.

Don’t risk fines, unpaid claims, or disputes — review your arrangements and double-check how you're classifying contractors.

Unsure about how to handle your subcontractors on your workers’ comp policy?

We can help you:

• Review contractor roles

• Ensure declarations are compliant

• Avoid gaps in cover at audit or claim time