Test Your Knowledge

Are your contractors really contractors or are they employees?

 It can sometimes be difficult to assess whether a person is an employee or a self-employed contractor. The difference is important, as different rules relating to employment standards will apply depending on a person's employment status.

Are your contractors working under any of the following arrangements?

• Paid at a set rate (for example, hourly weekly, monthly, or per unit of production)
• Get overtime pay or penalty rates
• Work set hours, or a given number of hours a week or month
• You set the standards for the amount and quality of their sales or output
• Work at your workplace or somewhere that you decide
• They are prevented from doing work for anyone else
• They follow the rules or procedures of the person they are working for.

If you have answered yes to more than one of these then you may need to consider whether they are really an employee.

Are your employees working under any of the following arrangements?

• They decide or control how they do the work eg when they take their holidays, when, where and what hours they work
• They provide their own equipment or tools
• provide or pay for their own training
• Are responsible for losses or their own bad management
• Are able to hire helpers to get their work done without needing to get permission from you
• Are responsible for paying their additional hired help from their own funds
• Are free to work for other people
• Their contract says they'll be penalised in some way if they stopped work, or left without completing a particular project

If you have answered yes to more than one of these then you may need to consider their employment status.