When is an employee an employee?

It might sound weird but this is a question you may need to ask, especially in relation to superannuation.

One of the buzzwords in the Fair Work Act 2009 was ‘sham contracting’.

A key component of this relates to whether a worker is deemed an employee for the purposes of your obligations under the Superannuation Act.

You may have engaged a person whom you believe to be a contractor, only to later have a payment claim lodged against you for the payment of superannuation.

So when is an employee an employee?

Below is a quick guide to determine your obligations as an employer:

  1. Is there a commercial arrangement in place (Contract of Service Agreement)?
  2. Do you allow that person to work elsewhere?
  3. Does the worker have control of how and when the work is completed?

If you answered NO to any of the above three questions, then you may be in for a shock!

For the purposes of superannuation, this person would be deemed an employee and as such you would need to pay superannuation.

If you’re not sure or have concerns, contact us at Human Outsource and we can help you sort this out.