Independent Contracting Traps

There are lots of contracts relating to employment these days - it can be really confusing.

In addition to traditional employee working arrangements (enterprise agreements, modern awards, common law employment contracts), there are independent contractors. In some trades, they are referred to as sub-contractors or subbies, or consultants.

Currently there is a growing practice of recruiting people as independent contractors or independent agents, rather than as employees. If you enter into an employment relationship that describes you as an independent agent or an independent contractor then there are certain things about your terms and conditions and entitlements you need to know. If you are in doubt, get advice.

Employee, Independent Contractor - What's the difference?

pindcontract

Independent contractors have responsibilities which employees do not have to worry about. These responsibilities are costly. As an independent contractor:

  • You may have to arrange your taxes
  • You have to pay for time off work for holidays or sickness
  • You have to save for your retirement
  • You may have to pay for sickness/accident insurance
  • You may have to pay for your tools, travel expenses, telephone, advertising, etc.

 

Legal protection for employees include:

  • Pay rates and minimum terms and conditions of employment
  • WorkCover
  • Protection against unfair dismissal
  • Wage recovery
  • Tax

What about health and safety?

Occupational Health and Safety laws apply to independent contractors as well as employees.

 

Independent Contracting Traps