setting up an employee in business

[BUSHBABY]

I find this amusing, that we as employers are asked/expected/advised etc to assist employees in setting up their own business, but when the time comes there is no help from government. We set up 2 employees in business, they are making what they did when they were employed. Except instead of receiving wages, they produce the goods and invoice and are paid cash. No UIF cover, and much to my disgust Compensation Commissioner will not permit them to remain on our books. So in the event they are injured on our premises, who will pay? We will as they couldn't afford it.
Sorry, just letting off steam about the unfairness of it all.

[Dave A]

Are they set up as subcontractors? If so and they are unregistered for Workmans Compensation, you may (in fact might be obliged) to include payments to them in your workmans compensation returns and deduct the costs associated from remittances.

We are doing the facilities management for a large corporate on a site and part of the task is to deal with small piece contracts. Quite often this is placed with small (emerging) contractors without workmans compensation cover, but the conditions of entry to the site are that each person must be covered by workmans compensation (and safety induction and,and,and..). We, as head contractor, are instructed to deduct a percentage off all payments to ensure these workmen are covered and include the value in our workmans compensation.

I'll have to hunt up the details if this is the case - particularly as to how the deduction is calculated and reported. I relied quite heavily on the labour experts of the corporate client in getting the problem solved and from our side negotiations were handled by marketing, so whilst I got briefed on the gist of what was happening, I was not party to the finer details discussion.

[BUSHBABY]

I remember going to sites, few years ago, some are very sticky about the cover of WCC.
Yes, we have a contract drawn up with them. I've checked out the assessment forms with workmens comp., but don't see were you would insert for contractors! If you added them to the employees, how would you claim (if there is an IOD, submitting certified ID and claim form) - or does the contractor became an employee? this is very interesting thank you - would definitely look forward to any further info you have. But I still think this is so unfair.

[Dave A]

You add it to your reported payroll I think. What bugs me is they can screw up your no claim bonus and safety rating which in part is why the corporate sites are so keen to use facilities management companies as go-betweens for this sort of thing.

Quite often they're picking the contractor and we've got to make sure it's all tidy.

I'm having a little difficulty right now getting clarity on how the value is determined, or if someone was just passing the buck. Apparently we put our foot down in the end and insisted the subbies registered for WC in their own business structure. Rather relieved actually. It all sounds like quite a PITA. I'll keep tugging at sleeves for answers.

I'd suggest you compell them to register for WC in their own right.