Sub-Contractor or Employee?

Do you engage independent contractors? If the answer is yes, then it is a good idea to regularly review the arrangements to make sure that they are really contractors and not actually employees. When deciding whether a person is a contractor or an employee, the terms of the contract is key.

Some things that may make the arrangement a true contracting arrangement are:

???? The individual has a high level of control over how they perform the work and when they perform the work;

???? The individual can work for more than one client at a time;???? The individual usually decides their own hours of work;

???? The individual is usually engaged for a specific task or project;

???? The individual bears financial risk of making a profit or loss and paying GST etc;

???? The individual uses their own tools and equipment + email and internet connection;

???? The individual does not have access to paid leave entitlements;

???? The individual is paid to deliver a particular result rather than by the hour.

There are some exceptions but it is worth reviewing your arrangements regularly to avoid inadvertently engaging in what is known as sham contracting which can attract financial penalties.

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