Independent Contractors and Employees – What is the difference?
Recently the Chamber has received several queries seeking assistance with identifying the differences between an employee and an independent contractor. This is a tricky question to navigate, and there is no set factor or combination of factors that will determine whether a worker is an employee or independent contractor. Each determination is based on the individual merits of the case, with courts and tribunals considering the totality of the employment relationship between the parties when examining the employment relationship.
However, there are some general indicators that can be applied when determining whether a person is an employee or independent contractor. We have provided an adapted table from Fair Work below:
The ATO provides a useful employee/contractor decision tool here, which can assist in determining which classification is the correct one for your situation.
The legislation governing the rights and entitlements of independent contractors are the Independent Contractors Act 2006 (Cth) and the Fair Work Act 2009 (Cth). Should you require any further information or assistance in understanding or determining if your workers are contractors or employees please contact the Workplace Relations team on 1300 277 881 or firstname.lastname@example.org.