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James Millar
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CG, post: 123173 wrote:
A member of my family has been working as a contractor for a company for several years now, with an ABN for labour only at an hourly rate to which GST is added.* He works 4 days a week, usually full-time on those days, with virtually no flexibility.

His employer has just written to inform him that ‘because of newly introduced legislation’ they are required to treat him as an employee for super guarantee contributions, and they will accordingly be deducting 9% from his hourly rate from now on for this purpose so would he please give them details of his super fund, membership number etc. .(emphasis mine)

I’ve been telling him for ages that they should should have been paying 9% super for him. But to force a decrease in pay to cover it seems absolutely wrong. I’m not sure if they are just trying it on, hoping that he is ignorant, or whether they really fail to understand their obligations as may be indicated by their apparently thinking this is a newly introduced requirement. Are they in fact allowed to do this?

What course of action would you advise? Any help will be much appreciated.

* (He reports this income to the ATO on the quarterly BAS with the income from his sole trader business, and pays the GST on it then.)

Completely depends on his contract with them. If he has no contract or the contract can be revised or terminated then it may be the case of like or lump it. Keep in mind that super is still considered remuneration just in a different form.

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