On an almost daily basis, I meet with business owners and HR advisors who tell me, “We only engage contractors; we’ve always done it this way and we haven’t really had cause to review the engagement since we began it.”
Often they are shocked when upon review, the current engagement doesn’t stack up and they are exposed to risk – namely, that their contractors are, in fact, their employees.
So, how can you be certain that your contractor engagement solution is compliant?
- Practice what you preach – If your contract allows the contractors to work for other clients, delegate work and accept/reject work as it suits their business requirements, make sure that you allow this to happen in practice. All too often, we find that the agreement doesn’t marry up with the operation.
- Review your engagement regularly – Industrial relations is one of the most ever-changing landscapes within the business community. Make sure that you have a mechanism to ensure that you capture any changes to deeming laws, the treatment of contractor payments/expenses and that you regularly apply those changes within your business.
- Get advice – All too often, businesses rely on their accountant or commercial lawyer for industrial relations advice. This area of expertise is so unique and complex that you truly do need to seek specialist advice.
- Don’t dress it up – Make sure that the offers of work you are making are clearly communicated upfront. Ensure that workers are aware of your intent to enter into a contracting arrangement before they start work.
The benefits of engaging a contracted workforce are well documented: flexibility for both parties, remunerate and incentivise for results, increased productivity, scalability and independence. BUT, make sure that you aren’t attempting to misclassify your workforce without considering the contractor vs employee debate, or it could cost you.