24-09-2021 Maroochydore

Charge 1 – Section 51 Workers’ Compensation and Rehabilitation Act 2003 (WCRA) – Failure to insure

The employer was charged with failing to insure by under declaring wages of their employees.

On 16 January 2020, the insurer commenced a wage review/audit of the employer for the financial year 2018/2019. As part of this process, the insurer also requested financial documents for the 2017/2018 financial year.

On 5 March 2020, the wage audit was finalised. The results of the audit were that:

1. In the 2017/2018 financial year, the employer actually paid wages of $1,335,298.00 instead of the declared $500,000.00; and
2. In the 2018/2019 financial year, the employer actually paid wages of $1,898,756.00 instead of the declared $500,000.00.

On this date, the insurer issued an Overdue Account Notice reversing the previous premium amount of $11,746.35 for the 2017/2018 financial year and applying a new premium for the re-assessed premium amount, being $33,472.95. This amount was due and payable on 4 April 2020. In relation to this, the insurer also sent a letter to the employer stating that a decision had been made to apply a 100% premium penalty on the under declared wages.

On 17 March 2020, the insurer sent an email to the employer attaching a premium notice for payment.

On 18 March 2020, the director of the employer, sent an email to the insurer stating that the employer could not afford payment and that:

“All payments and projections we have previously given were honest and in good faith. The industry we are in meant numbers increased beyond out forecast but profits did not, in fact we made big losses”

On 19 March 2020, the insurer sent a letter to the employer stating that the insurer did not consider the reasons given to provide sufficient grounds to waive or reduce the penalty applied. In the covering email, the insurer offered a payment plan.

On 26 March 2020, the insurer sent an email to the employer referencing a telephone conversation and stated that a 24 month direct deposit instalment plan was the best they could offer. The employer did not agree to this.

On 27 November 2020, the insurer sent the employer an overdue account notice for the amount of $106,751.50.

Fined $18,000.00

$0

An employer should declare actual wages paid to the insurer to ensure their premium is correctly calculated.