Workers’ compensation obligations for home-based staff
You might be surprised to learn that if you employ staff that work from home, you could be liable for workers’ compensation if they’re injured. Do you know your workers' compensation obligations?
When my own business operated principally from a home office, I occasionally employed casual staff that worked from their homes. On the whole, the arrangement worked well for my staff and me. And just as well it did, because at the time, I didn’t realise the extent of the liability I was exposing myself to in terms of workers’ compensation obligations.
Liability for those working from home
One of the distinct features about home-based work is the employer’s relative lack of control over the situation.
When an employee works from home, either by necessity or for convenience, the employer’s capacity to ensure safety is somewhat restricted. As an employer, you wouldn’t routinely (if ever) undertake an occupational health and safety audit at your employee’s home, would you? Even if you did, what would happen if you spotted a dodgy set of stairs or some suspect wiring? Would you fix them?
Employers, and especially operating small businesses, aren’t typically in a position to assess or address the risks posed by an employee’s home or their at-home work habits.
"Problems can arise if you don’t take out workers’ compensation insurance in circumstances where you should, so it pays to know your obligations as an employer."
In a recent case, the Administrative Appeals Tribunal ruled that two separate injuries sustained by an employee whilst she worked from her home office occurred in the course of her employment. The employer was liable, and the employee was entitled to compensation.
The employee’s home office was situated on the first floor of her apartment. On two occasions, she lost her balance as a result of coughing, and fell down the stairs, hurting herself quite badly, and ultimately requiring surgery.
The issue for the Tribunal was whether or not the injuries sustained by the employee arose out of her employment. The Tribunal held that they did, because, in both instances, the injury happened during an interval within an overall period of work. That is, the Tribunal found that the employee was in effect ‘working’ at the times that she fell down the stairs. The fact that she was heading to the kitchen to fetch cough syrup when she fell didn’t mean she was acting outside the course of her employment – this was merely an interlude, a bit like a tea-break.
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Workers’ compensation obligations
The workers’ compensation system has been put in place to ensure that employees receive the compensation needed. If the employer is appropriately insured, liability for that compensation is borne by an insurer on an indemnity basis.
Problems can arise if you don’t take out workers’ compensation insurance in circumstances where you should, so it pays to know your obligations as an employer.
Workers’ compensation rules are state- and territory-based, so your obligations will vary depending where you’re located.
In Victoria, for instance, you must obtain a workers’ compensation policy if you pay or expect to pay more than $7,500 a year in remuneration, or if you employ any apprentices or trainees. In assessing remuneration, payments to directors are included, as are payments to ‘deemed’ employees.
Many small business owners find it difficult to determine their workers’ compensation obligations. If you’re one of them, you can obtain general information from WorkCover agencies and more specific advice from a professional adviser.
What other steps can be taken to manage the risk?
Beyond complying with workers’ compensation insurance obligations, it’s up to you to decide what steps are necessary and practical in the circumstances. If you do have employees working from home, it would be prudent to talk to them about their working environment and the importance of safety. It may also be advisable to draft an additional term into their employment contract, requiring them to:
- take reasonable steps to ensure their work environment is free from risk;
- work in a safe manner (and not to work if it would be unsafe to do so); and
- report injuries as soon as possible.
With the consent of the employee, you could conduct an audit at the employee’s home to see whether or not there might be unacceptable risk. If such risk does exist, it will probably need to be addressed, because the employer clearly has a duty of care to the employee, and that duty is immediately called upon if there is a foreseeable risk.
Remember, too, that if an employee does report an injury, you likely have reporting obligations to the relevant WorkCover authority. This typically applies regardless of whether you hold a workers’ compensation policy.
If you have employees working from home, what steps do you take to manage the workers’ compensation obligations and risk?