The Difference Between an Employee and A Contractor | Australia | Fair Work Act 2009

Описание: In this video, we discuss the importance of differentiating between an Employee and a Contractor.

Hello, I’m Nadia MacLeod from RP Emery Legal Kits, and we help businesses cut their legal costs with our online template kits.

Many employers choose to engage an employee as a contractor to save the additional costs that can come with hiring permanent or casual staff.

But is it really their choice?

Whether a worker is an employee or contractor is determined by several factors with no one factor necessarily conclusive.

As the employer, it's your obligation to examine all the facts in each case, including the terms of your contract with the worker which should show the intent of both parties.

A key factor in deciding if a worker is an employee is the degree of control that can be exercised over the worker.

If you have the right to direct how, when, where, and who is to perform the work, the worker is likely to be an employee. These directions may be verbal or in writing, or simply understood between the parties.

Another factor to consider is whether the worker is being paid for the time they work, or being paid for a result.

Workers being paid by the hour are more likely to be employees. Workers being paid as a result are more likely to be independent contractors.

The Australian Taxation Office provides an Employee / Contractor Decision Tool that you can use to help you decide.

Based on an assessment of all factors, if a worker is an employee, it's your obligation as the payer to withhold the appropriate amount of tax from any payments made to them.

As an employer, you may also have obligations under fringe benefits tax and the superannuation guarantee laws.

Once you’ve made the decision about your new staff member it’s vital to provide them with a written agreement that outlines the terms of their employment.

RP Emery provides up-to-date Employment Agreements for all types of employer/employee relationships and Independent Contractor Agreements.


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