02 Aug 2012
“Employee or Independent Contractor - Are you really sure?!”
Whilst many businesses are faced with this decision regularly and need both employees and independent contractors to ensure the commercial success of its operations, distinguishing and determining whether an individual is an employee or contractor continues to be a challenge for businesses and employers under the current workplace regime. It is a significant issue that unfortunately, as case law shows us time and time again, doesn’t always receive the attention it warrants - at great peril to businesses who get caught out!
Over the last few years, particularly with the introduction of the 'sham contracting' provisions under the Fair Work Act 2009 (Cth), this issue has been the subject of many court decisions that demonstrate exactly how costly it can be for employers if they get it wrong!
Correctly classifying an individual in your business is important not only in relation to what employment obligations may be applicable, but in relation to Superannuation, Taxation and WorkCover obligations.
Acknowledging how significant the issue is and to address some of the confusion and assist businesses in determining who is or is not an employee, the Australian Taxation Office ("ATO") has launched a new "Employee or Contractor homepage". Please click here to access it.
Whilst the tools provided by the ATO will assist employers from a taxation perspective, businesses will still need to ensure the management of their workforce complies with all relevant workplace and employment laws to avoid significant costs and potential penalties.
If you have any questions about how you should be engaging individuals, please contact a member of our Workplace Relations Team in Sydney.
