Contractors vs employees: how to be sure your ‘contractors’ aren’t in fact ‘employees’
Date posted: Wednesday, April 9, 2014
It’s important that businesses know the difference between ‘independent contractors’ and ‘employees’ for superannuation, pay and workplace relationship obligations.
As a rule, contractors work and service organisations, while working in and for their own business. An employee however, completes this work whilst working in and for the employer’s business. A worker cannot be considered as an independent contractors simply because they have an ABN.
Other differences which can help employers determine whether a worker is an employee of an independent contractor are:
- The workers ability to sub-contract or delegate the task to other workers
- The basis of payment
- The equipment or tools which are provided by the employer
- The independence the worker has in carrying out their work
There are various issues that may arise if an employer wrongfully considers an employee as an independent contractor. These include employers not fulfilling their superannuation payment requirements or not maintaining fair work practices in terms of payment for service or dismissal.
Still not sure whether your workers are employees or contractors? You can find out more by giving us a call, sending us an email or booking in for a visit. We specialise in servicing individuals and businesses in the South Eastern Suburbs including Pakenham, Lakeside, Berwick, Nar Nar Goon, Garfield, Tynong and Koo Wee Rup.