Employees vs contractors: Beware the “myths” 

myth or reality

 

 

From Smartcompany, Terry Hayes discusses myths about the classification of workers in Australia.  Unfortunately, the myths are not limited to Australia and these myths can be found in United States (with slightly different termonology).  Terry identifies these five myths:

Myth 1: If the worker has an ABN, they’re a contractor

ATO view: Having an Australian Business Number (ABN) makes no difference, and will not make a worker a contractor for a job. If the working arrangement is employment, whether the worker has or quotes an ABN will not make them a contractor.

Myth 2: If the worker only works for short periods, they’re a contractor

ATO view: Whether the work is short-term or irregular makes no difference and will not make a worker a contractor for a job. The working arrangement determines whether they are an employee or a contractor, not the amount of time they work for someone.

Myth 3: If others in my industry are doing the same, then my worker is a contractor

ATO view: Industry practices make no difference and will not make workers a contractor for a job. The ATO warns that businesses should not assume other businesses have worked out the employment relationship correctly – “It’s your working arrangement that determines if your workers are employees or contractors”.

Myth 4: If the contract or agreement says so, the worker is a contractor

ATO view: A contact or agreement makes no difference and will not make a worker a contractor for a job. If the working arrangement is employment, a contract or agreement stating the worker is a contractor won’t override this employment arrangement or change the obligations the business needs to meet.

Myth 5: If the worker submits an invoice, they are a contractor

ATO view: Submitting an invoice for work done or being “paid on invoice” makes no difference and will not make a worker a contractor for a job. The working arrangement determines whether they are an employee or a contractor, not whether they submit an invoice, according to the ATO.

Read the full story at Employees vs contractors: Beware the “myths” 

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