Making the right decision about whether your worker is an independent contractor or an employee is critically important at the moment, with the Australian Taxation Office, Fair Work Australia and Workcover focusing their considerable resources in detecting breaches of the laws.
Knowledge of these laws is just as important if you are a worker and unsure if you are being paid correctly.
Generally, a worker is an employee if they:
- are paid for time worked
- receive paid leave (for example, sick, annual or recreation, or long service leave)
- are not responsible for providing the materials or equipment required to do their job
- must perform the duties of their position
- agree to provide their personal services
- work hours set by an agreement or award
- are recognised as part and parcel of the payer’s business
- take no commercial risks and cannot make a profit or loss from the work performed.
A key factor in deciding if a worker is an employee is the degree of control that can be exercised over the worker. Another key factor to consider is whether the worker is being paid for the time they work, or being paid for a result. Workers being paid by the hour are more likely to be employees. Workers being paid for a result are more likely to be independent contractors.
If you are an employer or a worker and you are unsure about the legislation please call us. There is also a large amount of help on the internet … just type in “contractor v employee”.
