1. Are your Independent Contractors
really Employees...???
How often do you complain that you
are swamped in paperwork? How
much of your time is currently
concerned with the administration of
independent contractors? Are these
persons truly independent, or are you
“housing” employees? In actual fact,
if these contractors are employees, you
will face detrimental effects on your
business in terms of accruing
superannuation, workers'
compensation, payroll tax and workers'
entitlements just to name a few.
H
aving a direct relationship with your
independent contractors can be
damaging.
So, how do you break the relationship with
existing employees and contractors? There
is one truly effective way of managing the
process - and that is through Agency
Contracting. This process enables you to
legitimately engage independent
contractors, outside the jurisdiction of the
Industrial Relations system. This means
you can contract people with the required
skills, through an Agency, as independent
contractors. These contractors perform
required tasks to your satisfaction, you pay
the Agency a pre-arranged contracted price,
and the agency pays the contractors. The
Agency also takes care of all statutory and
legal requirements including tax, workers'
compensation, payroll tax, public liability
and other required insurances along with
superannuation, where applicable.
The advantages of using agency contracting
are quite enormous, regardless of the size or
scope of your business. Based on a high
court ruling, your existing personnel, or
workers acquired through agency
contracting are not deemed to be employees
of your business, are not subject to award
conditions, and besides OHS responsibilities
have no contractual connection whatsoever
to your business.
This means you are in control. Your
contracts can be arranged on a daily
basis. Any service you want can be
delivered, you can alter your contract
specifications to improve services, you
can place some, or all, of your current
workforce on the system. Most
importantly you are the client - the
system responds to your needs.
Contracting Solutions provides Agency
Contracting services - they are not an
employment agency - they simply offer a
service where all your existing and future
contractors are placed on their books -
rather than yours - freeing up your time to
get back to your real business.
“Our system is attached to a clause in the
taxation act that removes the
requirement for our Independent
Contractors to be registered for GST or
operate an ABN regardless of their
earnings…....No more BAS Statements!!”
Many jurisdictions (State and Federal) have
a vested interest to classify your
Independent Contractors as employees.
These reasons are purely based on a
financial gain that is at your expense. The
State Revenue Department (Payroll Tax),
Workcover (Workers Compensation
Premiums), Unions (Memberships/Workers
Entitlements), ATO (PAYG Tax),
Superannuation (9%) to name a few.
Generally speaking, if you have a direct
relationship with Independent Contractors
and their payments are based principally
for their labour generally speaking they are
employees and the above applies along
with PENALTIES and INTEREST..!!
Our model overcomes these issues and
creates clarity in the workplace.
So, what is Agency Contracting?
Through Agency Contracting you can
legitimately engage independent
contractors, outside the jurisdiction of the
Industrial Relations System. This system
has been tested in the High Court of
Australia. The process is simple and
cost effective.
People can enter work contracts freely and
for defined periods. It is simply a matter of
persons with the required skills needed by
your business register with the Agency as
independent contractors. These contractors
then perform required tasks to your
satisfaction, you pay the agency a pre-
arranged contracted price, and then the
Agency pays the contractors, plus pays and
administers all statutory and legal
requirements.
This is also a cost effective solution for
your business. On-costs associated with
people working under an award amount to
around a further 56 cents per dollar spent.
For the same hourly cost, you can use a
'Licensed Agency', and also have the
benefit of deciding when and for how long
to use the contractors' skills, check work is
completed on time - and to your
satisfaction, and the Agency fully
administers the needs and obligations of
the contractors.
Flexibility is the key to Agency Contracting
- You can keep a particular contractor for as
long or short a time as you like. If you
decide a contractor's services are no longer
required, you simply inform the Agency,
and they close the contract. No need to
worry about an unfair dismissal claim.
Agency Contracting can reflect the needs
of your changing business - by altering
contracts as your needs change.
Flexibility is the key to this arrangement.
To find out more about Agency
Contracting and the benefits available for
your business, contact Contracting
Solutions on 1300 85 7722.
Contracting Solutions
Frank Konstek