I’ve heard the term sham contracting. Does that mean contracting is illegal?
No. A sham contract is when a business deliberately disguises an employment relationship as an independent contracting arrangement, instead of engaging the worker as an employee.
Businesses can contract, but they must do so correctly.
Contracting is common practice.
- According to the Australian Bureau of Statistic, in 2012 there we 980,000 independent contractors (individual contractors that did not employ/engage others)
- A further 1,000,000 people were self-employed (engaged other workers)
- In total 17.2 per cent of the Australian workforce are self-employed, which equates to 1.9 million persons.
- The Fair Work Act protects genuine employees from ‘sham’ independent contracting arrangements
Disclaimer: This information does not constitute advice as we are unable to consider your individual circumstances.