Yes. An NT labour hire business must cover every individual it engages for workers compensation, whether the person is an employee or a contractor. NT WorkSafe’s employer bulletin, reviewed 5 January 2023, says a company breach can incur penalties of up to $179,000 and describes a temporary NT exception for workers normally employed in the employer’s home jurisdiction who are sent to work in the NT for no more than six months. Figures checked 1 October 2026.
Does calling someone a contractor avoid the cover requirement?
No. The labour hire direction is categorical: all individuals engaged by the labour hire business must be covered, regardless of whether they are employees or contractors.
The wider NT worker definition also looks beyond workplace labels. NT WorkSafe describes a worker as a natural person who performs work or a service under a contract and meets the employee test for PAYG withholding, even if the employer should be withholding tax but is not. If ATO guidance determines that someone is an employee, NT WorkSafe says the individual should be covered even if the employer thought they were a contractor.
For a labour hire business, the position is more direct: workers compensation cover follows the fact that the individual is engaged. It does not disappear because the engagement is described as contracting.
How is workers compensation different from PAYG and super?
They are separate duties. Workers compensation cover does not replace the host business’s PAYG and super obligations, while an employee or contractor classification for tax purposes is not a safe harbour for workers compensation.
| Issue | Workers compensation | PAYG and super |
|---|---|---|
| Who is covered or assessed? | A labour hire business must cover every individual it engages, whether employee or contractor. | The engaging business must assess the worker separately for tax and super purposes. |
| Does one decision settle the other? | No. A contractor label does not remove the labour hire cover requirement. | No. PAYG and super treatment does not replace workers compensation cover. |
| Relevant tool or guidance | Check the policy PDS and the NT WorkSafe requirements. | NT WorkSafe points businesses to ATO guidance and an online employee-or-contractor decision tool. |
NT WorkSafe says the ATO tool assists with employee or contractor assessment for tax and super purposes and that businesses engaging and paying workers should use it. The regulator’s page also says the tool is under review and currently unavailable, so check the page for an update before relying on it.
What should an NT labour hire business do?
- List every individual engaged. Include employees and contractors rather than filtering the workforce by label alone.
- Arrange the required workers compensation cover. Workers compensation insurance can be obtained by contacting an insurance broker.
- Use an approved insurer where NT cover is required. An employer employing workers specifically to work in the NT needs a policy with an approved insurer in the NT.
- Check the policy PDS. Confirm the insured activities, worker definition, exclusions and any disclosure requirements.
- Keep PAYG and super under a separate review. Use the available ATO guidance to assess the worker for those purposes.
- Seek independent advice if unsure. NT WorkSafe recommends independent professional advice on tax and other employer obligations when insurance requirements are unclear.
This is general information, not financial or legal advice. Check the NT WorkSafe regulator page and your policy’s PDS before acting.
Can workers temporarily sent to the NT rely on home-jurisdiction insurance?
There is a limited exception, but it should not be assumed to apply automatically to a labour hire arrangement.
| Worker arrangement | NT WorkSafe position |
|---|---|
| Employed specifically to work in the NT | Workers compensation insurance is required with an approved insurer in the NT. |
| Normally employed in the employer’s home jurisdiction and temporarily sent to the NT for no more than six months | The temporary exception may apply. Check with the home jurisdiction that the employer’s existing insurance covers those workers. |
The exception refers to workers normally employed by the employer in its home jurisdiction. If the actual labour hire arrangement differs, seek advice rather than assuming the exception applies.
What happens if workers compensation cover is missing?
| Exposure | Consequence identified by NT WorkSafe |
|---|---|
| An uninsured worker makes a claim | The employer is responsible for the cost, which could amount to millions of dollars. |
| The business has no insurance | Its financial viability may be at risk; for a sole trader, personal assets may also be exposed. |
| A company breaches the legislation | Penalties of up to $179,000 may apply. |
| The premium is not paid in full within one month after the insurer’s premium notice arrives | Interest is payable by the employer. |
What if a cleaning business engages subcontractors instead?
Where the cleaning business is a principal contractor, NT legislation makes it liable for claims made by workers of its subcontractors. It is also entitled to be indemnified by those subcontractors.
To avoid bearing claims from subcontractor workers, make sure each subcontractor has workers compensation insurance for its workers. NT WorkSafe also advises principal contractors to maintain their own insurance in case of oversight and to seek advice from an insurance broker or adviser.
Sources
FAQ
Must an NT labour hire business cover a genuine contractor?
Yes. NT WorkSafe says all individuals engaged by a labour hire business must be covered, regardless of whether they are employees or contractors.
Does the host business’s PAYG and super assessment determine workers compensation cover?
No. PAYG and super are separate obligations. The host business must assess the worker for those purposes, but that assessment does not remove the labour hire business’s workers compensation cover requirement.
What if an ATO assessment later identifies a worker as an employee?
NT WorkSafe says the individual should be covered even if the employer originally considered them a contractor. Any PAYG consequences remain a separate issue.
Can a worker temporarily sent to the NT use the employer’s home policy?
The temporary exception described by NT WorkSafe applies to workers normally employed in the employer’s home jurisdiction and sent to the NT for no more than six months. Check with the home jurisdiction that existing insurance covers them.
Is the ATO employee-or-contractor decision tool available?
The checked NT WorkSafe page says the ATO tool is under review and currently unavailable. Check the regulator page for any update.
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