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  • #969737
    Kept
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    • Total posts: 4
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    Hi,

    My friend, Cameron, is a sole trader who paints yachts in Sydney (very well might i add). I am a bookkeeper who should probably know the definitive answers to the below so i’m asking on both our behalves.

    With the approach of summer he has had a rush of work (yay!) and is considering hiring a friend of his to help out for a few months and i want to make sure i give him the correct guidance with regards to his obligations.

    I think (and the ATO website agrees) that he will have to take this person on as an employee as they don’t really fit into the contractor box, despite having an ABN, particularly because Cam will have to provide the painting gear and training (as the employee is a mechanic by trade). He won’t be an apprentice though as Cam is not eligible to train apprentices.

    My main question would be what are the requirements to be a casual employee as opposed to a part/full timer. The work, whilst possibly 30 – 40 hours a week, will likely only be for a few months so we don’t want to be accruing leave during this time. The fairwork site didn’t give a point at which one changes employment status.
    Further, with regards to casual employees, is casual loading mandatory or just courteous?

    Beyond that, i think Cam needs to consider:
    Minimum wage
    Minimum hours
    Workers comp
    Super choice
    PAYGW registration

    Did i miss anything?

    Any thoughts on the above, or other considerations would be greatly appreciated!

    Thank you for your time,

    Justin.

    #1040541
    Anonymous
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    • Total posts: 11,464
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    Hi Justin,

    Those are great questions. I’m sure someone around here will be able to help you out with them.

    Meanwhile, just wanted to say g’day, and welcome to Flying Solo.

    All the best,
    Jayne

    #1040542
    StellarScott
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    Welcome Kept and congratulations on trying to encourage good practices among your clients

    I agree on facts given definitely an employee

    As contract is short term only no issue with calling employee casual and paying appropriately. The casual loading including the AL adjustment is applied to the award rate that is approrpriate. Legally you must pay this amount as a minimum

    Fair work should be able to advise on the appropriate award if not sure

    As a casual there are no minimum hours

    I would also encourage a simple contract/ letter of offer so each party knows whats required. This would help any potential disputes that may arise at a later stage

    #1040543
    carlker
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    Hi Kept,
    I can only give you my experience on the questions you posed as I am in a very similar job to what you describe.

    I believe this person can be classed as a “Labour only subcontractor” as that is what I am classed as within my job. From my understanding you are just paid for the number of hours you work. The employer is obligated to pay super and I think workcover also. There are no other entitlements within this arrangement. No sick pay or holiday pay. The employee pays their own tax, I believe you can pay this yearly or quarterly on the pay as you go system as I have done both within the years I have been in the industry.

    Hope this helps
    Jay

    #1040544
    Kept
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    Thanks for the replies, I’ll look into a simple contract as you suggest Scott.
    Jay would a labour only subcontractor still submit an invoice?

    #1040545
    carlker
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    Yes! This is what I do and have been doing as a painter for the last 13 years. All relevant details such as the employers and employees ABN go on it. I also have the number of hours worked, location agreed hourly rate, price and a signature on it.

    #1040546
    StellarScott
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    Hi guys

    Labour only subcontractors may apply if you are paid on results NOT hours

    eg patients treated

    If the business has control of who how and when work is done and pays by the hour then according to the ATO they are an employee

    http://www.ato.gov.au/nonprofit/content.asp?doc=/content/4540.htm

    #1040547
    Kept
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    • Total posts: 4
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    Thanks again for both of your input.

    It would seem the safest bet is to go with the casual employee approach to avoid any issues down the track. Expense wise they’re the same, it’s just a cash flow timing issue in terms of the paygw payment (less to employee now, more to ato later) for the employee approach.

    #1040548
    c2cemploymentrelations
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    • Total posts: 31
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    Hello

    If I can jump into this discussion with a few points.

    Firstly a casual employee DOES have a minimum engagement of hours if they are covered by a Modern Award. If you want some flexibility with your employment arrangement then hiring a casual employee is the safest way to go, especially if you cannot offer ongoing employment. A casual is entitled to be paid their minimum wage plus a 25% casual loading (this is in lieu of permanent entitlements such as annual leave and sick leave). However if you are a business moving from the State to the Federal system with the Fair Work changes then you may be subject to transitional provisions.

    A ‘Labour Only Subcontractor’ or the term used on this forum is something that can get a business in a lot of trouble. If the Employee is genuinely employed by the business it is the Employer’s responsibility to ensure PAYG is deducted, Super is paid and the Employee receives the minimum wages and entitlements as per their Award. If an Employee is aggrieved and decides to lodge a claim against their Employer for not receiving their correct entitlements and benefits the Employer may be liable for back pay.

    Also remember the ATO’s legislation and provisions for Employees is separate and distinct from Fair Work Australia’s legislation and provisions for Employees and Employers must adhere to both.

    Feel free to send me a private message if you want some further information

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