Employment Law - Contractor or Employee
March 2011
Do you know whether the people working in your business are contractors or employees? It makes a difference to owners of businesses and employees or contractors.
It may seem advantageous for taxation or other reasons to be nominated as a contractor. However, if this is not the case, it can rebound on employers and the employees. The employer can become liable for PAYG taxes, Payroll Tax or Workers Compensation insurance or liability.
In many cases employers have been liable to pay employees holiday pay for past years when the parties thought they were in a simple contract arrangement where holidays were not applicable.
The difference is mainly the level of control by each party within the relationship between employer and employee. Other factors are the extent to which work is done for other organisations, the obligation to work, arrangements for holidays, sick leave and other factors.
Appropriate employment agreements or contractor’s agreements and a thoughtful approach will help avoid the problem. Be careful not to enter into a “sham” contractor’s agreement which can be construed as an employment contract anyway.
Other employment issues will be the subject of discussion in future bulletins.
John Graves
Principal
Bradfield & Scott Lawyers
Level 1, 175 Macquarie Street
Sydney NSW 2000
Telephone: 9233 7299
Email: jgraves@bradscott.com.au
It may seem advantageous for taxation or other reasons to be nominated as a contractor. However, if this is not the case, it can rebound on employers and the employees. The employer can become liable for PAYG taxes, Payroll Tax or Workers Compensation insurance or liability.
In many cases employers have been liable to pay employees holiday pay for past years when the parties thought they were in a simple contract arrangement where holidays were not applicable.
The difference is mainly the level of control by each party within the relationship between employer and employee. Other factors are the extent to which work is done for other organisations, the obligation to work, arrangements for holidays, sick leave and other factors.
Appropriate employment agreements or contractor’s agreements and a thoughtful approach will help avoid the problem. Be careful not to enter into a “sham” contractor’s agreement which can be construed as an employment contract anyway.
Other employment issues will be the subject of discussion in future bulletins.
John Graves
Principal
Bradfield & Scott Lawyers
Level 1, 175 Macquarie Street
Sydney NSW 2000
Telephone: 9233 7299
Email: jgraves@bradscott.com.au
