WorkSafe Contractor Guidelines: Owner Drivers

The contractor guidelines for owner drivers are applicable from the 1^st July 2013 and they are made under 7A (4) of the Act.

The purpose of the guidelines is to clarify when an owner driver is actually carrying on an independent business or trade and the percentage of deductions that can be applied so as to determine the due remuneration.

These guidelines are released by WorkSafe Victoria and for the purpose of their insurance an unincorporated owner driver is considered the worker of the person hiring them unless it can be determined that the owner driver is conducting an independent business or trade according to these guidelines.

The amount that is owed and should be paid to a person that is a deemed worker for completing transport services needs to have the applicable percentage deducted under these guidelines.

The full guidelines are available at http://www.worksafe.vic.gov.au, please see an except from these guidelines below:

Remuneration. 

A hirer must declare the applicable deemed remuneration amounts under its WorkSafe Insurance policy. In addition, under section 5A(6) of the Act, an owner driver’s pre-injury average weekly earnings for compensation purposes must be calculated by WorkSafe with reference to the amounts payable to the owner driver and deemed to be remuneration.

Guidelines 

Will an incorporated owner driver be deemed to be a worker of a hirer for WorkSafe insurance purposes? 

Where an incorporated owner driver enters into a contractual arrangement with a hirer:

• the individual or individuals that perform, or can be expected to perform, the transport services under that arrangement will not be deemed to be a worker of the hirer; and
• the amounts paid or payable to the owner driver’s company under that arrangement are not required to be declared as remuneration under the hirer’s WorkSafe Insurance policy.

The incorporated owner driver will need to obtain and keep in force a WorkSafe Insurance policy  if it pays, or expects to pay more than $7,500 per financial year in remuneration, or if it hires apprentices or trainees.

Will an unincorporated owner driver be deemed to be a worker of a hirer for WorkSafe insurance purposes? 

For a test period under a contractual arrangement between an unincorporated owner driver and a hirer, the unincorporated owner driver will be deemed to be a worker of the hirer unless WorkSafe considers that the arrangement is part of the owner driver’s independent trade or business during that period.    

When will WorkSafe consider that an unincorporated owner driver is carrying on an independent trade or business?

WorkSafe considers that an unincorporated owner driver is carrying on an independent trade or business for a test period where the unincorporated owner  driver enters into a contractual arrangement with a hirer (the relevant hirer) and any of the following conditions apply for a test period – relief drivers perform or are to perform at least 20% of the goods transport services: 

• under the contractual arrangement, the unincorporated owner driver engages, or is to engage,
• under that arrangement, relief drivers or sub contracted drivers (other than a member of a family) who perform at least 20% (by gross contractual income) of the goods transport services;

or

• less than 80% of overall services income is or is to be earned from the relevant hirer: the unincorporated owner driver has performed, or is to perform, under contractual arrangements, goods transport services for the relevant hirer and at least two other hirers and does or will not earn more than 80% of their overall goods transport services income from any one hirer; or
• goods transport services are or are to be performed on less than 180 days for the relevant hirer: under contractual arrangements, the unincorporated owner driver provides, or is to provide, goods transport services –
  • to the relevant hirer and at least one other hirer during the test period; and
  • to the relevant hirer on less than 180 days in that test period and has also provided those services to that hirer on less than 180 days in the previous test period; or

 

• services are performed on less than 3 days a week for the relevant hirer: under contractual arrangements, the unincorporated owner driver provides, or is to provide, goods transport services –
  • to the relevant hirer and at least one other hirer during the test period; and
  • the unincorporated owner driver performs or is to perform goods transport services for the relevant hirer on less than 3 days a week for at least 26 weeks during that test period.

What is the deemed remuneration amount for a deemed worker?

If an owner driver is a deemed worker, then the deemed remuneration amount must be calculated in accordance with the following formula:

Deemed remuneration for a deemed worker = (1 – (D ÷ 100)) x P

• P means the amounts paid or payable to the deemed worker for the period under the contractual arrangement.
• D means either the applicable standard percentage deduction or the applicable non-standard percentage deduction for the period.

Source:http://www.worksafe.vic.gov.au/__data/assets/pdf_file/0018/53415/Owner-driver-guidelines-2013.pdf