Independent Contracting Traps

If you are an independent contractor, you are not an employee but are working for yourself. Generally, independent contractors are running their own business, and the emphasis is on getting a particular job finished, rather than working a particular number of hours.

However, in some circumstances, workers may regard themselves as employees, but the person they are working for considers them to be independent contractors. This may be because they think it is cheaper and/or that it limits their legal obligations.

A worker engaged as an independent contractor may be legally recognised as an employee (and vice versa) in certain circumstances. It is important to understand this, because many laws which protect employees’ rights do not apply to independent contractors.

Independent contractor or employee?

Whether a worker is an employee or an independent contractor depends on a range of factors taken together.  The factors which are considered include:-

• the amount of control over how work is performed
• financial responsibility and risk
• who supplies the tools and equipment
• ability to delegate or subcontract work
• hours of work
• expectation of work continuing.

Not one of these factors is enough, by itself, to make somebody an independent contractor. All the factors are considered. If you are unsure as to whether you are really working as an independent contractor, contact JobWatch, your union, or a lawyer for further assistance.

Some issues to consider include:

• Workers compensation / WorkCover
• Occupational health and safety
• Wages and conditions
• Superannuation
• Taxation
• Sham Contracting
• Unfair dismissal

For more information about independent contracting, we recommend you download the ‘Independent Contracting Traps’ Fact Sheet.

For further support

Call our Telephone Information Service on Melbourne Metro (03) 9662 1933 or Regional Victoria, Queensland and Tasmania on 1800 331 617.