Being good bosses, we're sure you've got some pretty solid health and safety in place. But of course, accidents happen, and that's when ACC comes into play. ACC is a government payment, but employers still have some financial responsibilities if somebody gets hurt at work.
But where does a work-related injury begin and end?
What if your employee was on the way to work when they did the damage? Well, if they weren't actually on work property, you might be off the hook. The company is only liable for the first week’s ACC payment if the employee was injured while actually working. But there are some grey areas; if someone is off the clock, but driving a company vehicle, that could be considered "work-related".
The decision ultimately rests with ACC - they get to decide whether to accept the claim as a work injury.
Okay, so let's assume the worst. One of your people got hurt in the line of duty. How much do you have to pay?
It's not too bad: 80% of the employee’s ordinary earnings for the first week only. ACC will then kick in, and continue payments at the same 80% rate.
As part of this process, ACC will ask you for some details about your employee and your business, like earnings, hours and leave records.
If they're off for a while, your employee may find the reduction in income a bit rough. If that's the case, you can help out, but within limits. The balance (20%) of their ordinary pay can be made up with payments from their annual leave or sick leave. This is the employee's choice, so only do this if they've asked for it.
Don't be too generous! You can't give an employee more than 20% of their ordinary pay while they're on ACC. If you exceed this, ACC will stop payment, or they’ll have to pay the extra back.
To keep your payroll record-keeping tidy, make sure that the first week's pay, covered by you, is included in the employee's gross earnings (important for calculating holiday pay etc down the line). The rest of the payments, covered by ACC, aren't included, so don't add those to your earnings equation.
There's usually a bit of a gap between somebody applying for ACC payments and actually starting to receive them.
Make sure that ACC have accepted the claim as a work-related injury before you start making any payments. If they don't accept, you've paid up unnecessarily, and you may not be able to get that money back.
If somebody is injured outside of work, and is waiting for their first ACC payment (which can take a week to start up), their first week away can be taken as sick or annual leave (or alternate public holidays if any are available). Again, this is up to the employee - they can just tough it out if they prefer.
The employee still gains annual leave as per usual while they’re on ACC.
Getting better might be a gradual process.
Often somebody recovering from an injury will come back in stages, starting with shorter hours or doing different stuff. You'll need to start paying them for the time that they're working. ACC will work with you to help you work out how much they need to be paid during the transition back to work.
Well, that's the ABCs of ACC. We've covered the payment stuff, but that's not all you need to know! On the admin side, there are requirements like accident registers and notifying Worksafe. Of course, having decent health and safety and rostering in place can help prevent accidents or injuries in the first place. Check out resources from DairyNZ on smart rostering and Worksafe on health and safety.
Stay safe out there!
Any questions? Hit us up! Check out our contact page to see how to reach PaySauce. We're always happy to help you out.