Am I An Independent Contractor?
In gaining work you may find yourself being labelled as an independent contractor, but what does that mean and are you really an independent contractor?
People regularly find themselves confused as to why they may be called an independent contractor when a fellow co-worker is being labelled an employee. This confusion stems from both workers doing similar work, working similar hours and earning a similar wage. Nevertheless, although the workers appear to be performing the same tasks, the ‘independent contractor’ does not receive paid annual, personal or long service leave and generally has no entitlement to superannuation.
The unfortunate truth is that many individuals who should be labelled an employee, and receive such entitlements aforementioned, are being misled by their employer to think that they are an independent contractor and missing out on such benefits.
Common factors which may be used by the court in determining if you are an independent contractor include:
- are you able to decide how you work and what skills you need to use to complete the tasks;
- do you choose whether you want to employ workers to complete the work on your own behalf;
- do you pay your own superannuation and GST, as well as be responsible for the profit and loss within your business, ensuring that any work you undertake meets any expenses you occur in completing such work;
- do you have your own insurance;
- are you able to decide your hours of work;
- have you be hired on a specific task by a specific deadline and receive a fixed fee to complete the task or, alternately, an hourly rate; and
- do you invoice the work you complete with your own ABN for payment by your employer.
Whilst the above is not in fact a definitive list to ascertain whether you are an independent contractor, it is a starting point at raising flags when determining if you have been contracted into a sham contracting arrangement.
Sham contracting is unlawful under the Fair Work Act 2010 (Cth) and occurs where an employer makes intentional claims in an attempt to mislead an employee that they are an independent contractor, when they should more accurately be labelled an employee.
This article is not legal advice and should not be relied upon as legal advice. All articles found on this website are intended to provide informative information, nevertheless, in many instances legislation and case law has been simplified and/or paraphrased. If you would like personal legal advice based on your current circumstances, you should contact MurdockCheng Legal Practice for a free consultation.