Welcome to the gig economy. Subcontracting, outsourcing and freelancing are becoming ever more common as both workers and businesses chase flexibility. But having non-employees regularly work for you can open you up to a whole new range of liabilities.
Over the past decade, advances in technology and a hankering for greater weight on the ‘life’ side of work/life balance have heralded an explosion in freelancers, contractors and other temporary workers.
In fact, according to demographers McCrindle, one-third of the national workforce is now contingent workers, and more than 75 per cent of employers believe this way of life will become the norm.
It's not hard to see the appeal. Say you have an employee who's been working for you for five years and they want to become a work-from-home contractor.
They get to become self-employed and improve their work/life balance, while you save on a swag of taxes and overheads. Sounds like a win-win, right?
Not so fast.
“Even though the person may say they're working for themselves and have an ABN, the law may still determine them to be an employee if they're involved in an accident on your worksite, or even at their own home”
What makes an employee?
In the eyes of the law, whether a person working for you is technically a contractor or an employee can be murky.
“Even though the person may say they're working for themselves and have an ABN, the law may still determine them to be an employee if they're involved in an accident on your worksite, or even at their own home” says John Clark, Steadfast's Broker Support Manager.
So how do you keep contractors safe?
“That's the million dollar question” says Clark.
While you can't have eyes everywhere, there are certainly steps you can take to identify exposures and mitigate the risks.
First, you need to ensure that all workplaces adhere to your state or territory's workplace health and safety (WH&S) laws. That not only includes your business's premises, but also the location the contractor intends to work from.
Next, says Clark, if you're running a building site, for example, and sub-contractors visit, you need to provide a safety induction to comply with the law.
“You have to train your workers properly to ensure they're always doing the right things, even if they don't want to – such as wearing a safety harness on a roof” adds Clark.