Independent contractors

An independent contractor is someone who is self-employed and contracts their services to clients, such as other businesses. An example of an independent contractor could be a plumber who is hired by a business to fix a burst pipe. The plumber attends the business with his own tools and employees, fixes the pipe then bills the business for the cost of the job.

Although an independent contractor may perform work for a business, they are not regarded as an employee and will generally have different rights to employees.

Telling the difference between an independent contractor and an employee is not always a straightforward process. Some employers misrepresent or disguise employment relationships as independent contracting arrangements to avoid paying legal minimum rates of pay, tax and entitlements, such as annual leave and sick leave. Arrangements such as these are not genuine and may be regarded as sham contracting.

It is important that you know whether you are an independent contractor or an employee so you can be sure that you are receiving the correct entitlements.

For more information go to Fair Work Australia Ombudsman website at www.fairwork.gov.au.