Home' OsteoLife : Spring 2013 Contents 22 Australian Osteopathic Association
GUIDANCE FOR INDEPENDENT
The AOA HR Service often fields calls from independent contractors distressed
about the way they are being treated by their hiring principal and/or practice.
This article details rights and obligations to assist in preventing disputes with
THE NATURE OF AN INDEPENDENT
First, you need to know if you are
classified as an independent contractor
or an employee before entering into any
contract of engagement. This simple
understanding affects your entitlements
and obligations with the practice you
intend to work for.
There is nothing stopping an individual
from working in two different practices
as an employee for some work and as an
independent contractor for other work.
However, the working relationship must
be clear from the outset.
Unlike an employee, an independent
contractor works under a contract for
service to complete a specific service over
a period of time. Contractors generally
do not work regularly for an employer
and can choose the expertise needed, or
whether or not to do a particular job.
INDICATIVE FACTORS OF AN
No single factor makes a person an
independent contractor (or an employee).
It requires an overall assessment of all the
factors of the working arrangement for
which work is performed.
INDICATIVE FACTORS OF
Under workplace relations law,
employees are entitled to a minimum
set of conditions and standards that
independent contractors are not
entitled to. Again, no single point below
makes a person either an employee or
Courts will always consider the
entire working arrangement under
which the work is performed when
determining the status of a person's
Depending on your business structure,
some independent contractors are
entitled to superannuation, even though
you have an ABN. If the hirer is required
to pay your Superannuation Guarantee
contribution, your contract price may
change to reflect the extra expense.
Ideally, an independent contractor
contributes to their own fund.
Visit www.business.gov.au and read
the publication Independent Contractors:
Contracts Made Simple for further
clarification (enter 'contracts made
simple' in the search bar).
LEAVE AND REDUNDANCY
Independent contractors are not entitled
to particular 'employee' entitlements
like annual leave, personal/carers leave
or redundancy. If your contract specifies
that such leave will be acknowledged,
then this may be viewed as an indicative
factor of being an employee.
Under some state and territory laws, you
may be covered by an employer's workers
compensation insurance, even though
you are an independent contractor.
However, you may not be entitled
to workers compensation unless you
have arranged your own accident
protection insurance. Check this with
your state regulator or your insurer.
WORK HEALTH AND SAFETY LAWS
As an independent contractor, you
have rights and obligations under state,
territory and Commonwealth work health
and safety laws. Generally, the hirer must
provide a safe workplace for you, and
you must ensure that your actions also do
not put yourself or others at risk.
You must also alert the appropriate
people to hazardous workplace situations
and report all accidents and injuries.
TAXATION OBLIGATIONS FOR
There are certain taxation obligations
for independent contractors, and it is
important that you speak with your
accountant or the ATO to ensure you
understand your obligations.
TAX FILE NUMBER
A unique TFN number is issued by the
ATO in order to administer the payment
and collection of tax. If you are a sole
trader you must use your individual
TFN. If you are part of a partnership or
a registered company, you will need to
apply for a separate TFN.
AUSTRALIAN BUSINESS NUMBER
Independent contractors need to
have an ABN and provide it to the
businesses they are working for. If you
do not have an ABN before commencing
work, your hirer must legally deduct the
highest rate of tax, plus the Medicare
levy, from your payment.
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