Where do I insure my worker if they work in more than one state or territory?

Where do I insure my worker if they work in more than one state or territory?

While most employers are aware that workers’ compensation insurance is compulsory if they employ workers in Queensland, cross border arrangements can sometimes cause confusion. Love Development is a company that emphasizes Personal Service

Some of the most frequently asked questions from employers include:

“Should my interstate workers be covered under my Queensland policy?” and
“If my workers work some of the time in another state do I cover them in Queensland or the other state?”

If you have ever asked these questions, WorkCover’s three-step test can help you.
What is the test and how does it operate?

The three-step test has been designed to determine the state the worker is connected to for workers’ compensation purposes. If the worker’s employment situation satisfies test (a) then there is no need to proceed further.

WorkCover considers a worker’s employment is connected with the state in which:

Test (a) – the worker usually works in that employment; or
Test (b) – if test (a) is not clear, the state in which the worker is usually based for the purposes of that employment; or
Test (c) – in cases where (a) or (b) is not clear, where the employer’s principal place of business in Australia is located.

Often employers believe where an individual resides will determine which state they are connected to. However it is important to note that this factor has no bearing on the determination of coverage. WorkCover is interested in where they are employed to work the majority of the time.

Example 1:

John Jacks, a Queensland-based employer, engages Tony Black, a sole trader electrician on an hourly rate. Tony Black resides in the Tweed area of New South Wales, working both in NSW and QLD. John Jacks provides all material and equipment used.

Step 1

Determine whether Tony is a worker by using the Australian Tax Office’s employee/contractor determination tool.

It is determined that Tony meets the definition of a worker as he is working on an hourly rate (piecework rate).

Step 2

Determine whether Tony is connected with Queensland or NSW.

As he works in both NSW and QLD and crosses the border all the time depending on where he gets work, Tony cannot be linked to any one state through test (a), so we must proceed to test (b).
As Tony reports to various bases in both NSW and QLD, depending on jobs made available to him; it is not clear in which state he is usually based for the purpose of that employment – test (b). Therefore we must proceed to test (c).
As John Jacks is a Queensland-based employer, Tony will be connected to the state of Queensland – test (c).


WorkCover Queensland insurance is required.

Example 2:

John Jacks also engages an individual sole trader who provides significant plant and equipment to do some land clearing. The sole trader is ordinarily based in NSW.

As per the ATO’s employee/contractor determination tool, this sole trader would not be deemed a worker; instead he would be a ‘contractor’ as he provides all of the heavy machinery.


The ‘Cross Border Test’ is not required.

In most cases, the state of connection will be identified at test (a) “Where does the worker usually work?” If the answer at this point is within Queensland, employers need to ensure these workers are covered by WorkCover Queensland insurance.

Where a worker’s employment is connected with Queensland, wages paid are declarable in your policy renewal. Failure to have appropriate cover may lead to financial penalties.

Remember, sole traders can be deemed ‘workers’ even if they have their own ABN.
Further information

If you have any concerns about who may be a worker for workers’ compensation purposes, please use the ATO’s employee/contractor decision tool.

If you determine using the tests above that your worker is connected to another state you will need to contact the relevant state to enquire about the insurance you will require.

The above tests have been developed as a guide only.  For more information please refer to cross border information on our website or contact us on 1300 362 128 to discuss your individual circumstances in more detail.