Financial Viability

The Chief Executive reviews the financial viability of licence applicants to ensure:

• the business is able to meet operating costs and expenses or for new businesses, projected expenses
• workers can be paid promptly
• the business has the capacity to pay other obligations and entitlements.

On application, each applicant will have to declare that they are financially viable. The applicant will also need to advise if:

• an applicant has operated another labour hire business within the last five years
• a business has been operating for less than 12 months
• a close associate of the applicant has been made insolvent under the Corporations Act 2001 (Cth) (if the applicant is an individual)
• a related body corporate has been subject to an appointment of an administrator, liquidator, receiver or receiver-manager under the Corporations Act  2001 (Cth) (if the applicant is a corporation).

Applicants will need to nominate the documents that demonstrate that they are financially viable. Applicants must nominate a minimum of six documents, of which at least four must be primary documents.

Applicants must be able to produce their nominated documents for vetting or auditing if requested by the Office of Industrial Relations. Licensees must retain the documents for seven years after the licensee ceases to have a licence or as required under other legislation, whichever is later.

Documents

Businesses operating for over a year

Primary documents

• Evidence of a business bank account
• Letter from your financial institution
• Financial reports that meet the reporting requirements under the Corporations Act 2001 (Cth)
• Financial statements for the previous financial year (financial statements can include a profit and loss, balance sheet and cash flow statement)
• Time and wages records (including employee payslips)
• Evidence of payments to industry superannuation funds
• A business plan that demonstrates how you are able to meet financial obligations
• Statement of cashflow

Secondary documents

• Business activity statement
• Projected profit and loss
• Public liability insurance/professional indemnity insurance
• Insolvency insurance
• Evidence of a line of credit with a bank
• Parent company or investor guarantees
• Australian Taxation Office (ATO) self-assessment business viability
• Evidence of payments to portable long service leave funds
• Evidence of payments to WorkCover Queensland

New businesses or businesses operating under a year

Primary documents

• Evidence of a business bank account
• Letter from your financial institution
• A business plan that demonstrates how you are able to meet financial obligations (expected figures or estimates)
• Accountant letter from a chartered accountant certified practicing accountant or IPA public accountant confirming that you are solvent for the purposes of obtaining a labour hire licence
• Statement of financial position (may include projected profit and loss)
• Statement of cash flow (may include projected)
• Time and wages records (including employee pay slips)
• Evidence of payments to industry superannuation funds

Secondary documents

• Completion of either the Australian Government’s – Starting your business checklist or the Queensland Government’s – Business skills checklist
• Business activity statement
• Insolvency insurance
• Evidence of a line of credit with a bank
• Parent company or investor guarantees
• Public liability insurance/professional indemnity insurance
• ATO self-assessment of business viability
• Evidence of payments to portable long service leave funds
• Evidence of payments to WorkCover Queensland

In addition to these requirements, a new business licence may be subject to a condition. For example, a mandatory investigation or inspection of the business after a stated period of time.

Source: Labour Hire Licensing Queensland

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Disclaimer:

The information in this post is strictly for informational and educational purposes only and should not be construed as legal advice. It is not intended to express specific opinions about specific cases. Before acting on any of the issues discussed in this post, seek additional advice. The information provided should not be relied on for any purpose other than to assist you to understand how Workers’ Compensation insurance works. It is for illustrative purposes only and My WorkCover Solutions Pty Ltd does not accept liability for any loss or damage suffered by any person resulting in any way from the use of or reliance on, the information provided. The information in this article is believed to be correct as of the date of publication. However, changes in the applicable laws may have an impact on the accuracy of the material. This article contains general information that is not tailored to any specific person’s situation. This publication may contain information that relates to the regulation of Workers’ Compensation insurance in your State or Territory. To ensure you comply with your legal obligations, we would recommend you refer to the appropriate legislation as currently in force in the State or Territory you conduct your business. You can find up-to-date legislation by visiting each state’s WorkCover Authority website, alternatively contact myWorkCover for updated information.