Incorrectly classifying an employee as a contractor can be costly. Businesses can be fined up to $54,000 for sham contracting. It is easy to ensure you avoid such fines with advice from our human resources (HR) specialists.
Employee or Contractor – Sham contracting occurs when an employer disguises an employment relationship as independent contracting to avoid providing workers with standard entitlements and benefits.
The Fair Work Ombudsman (FWO) has filed legal action against Foodora, alleging sham contracting. Despite workers signing Independent Contractor Agreements, the FWO claims their conditions, such as wearing branded uniforms, supervision, and control over hours and locations, indicate they were employees, not contractors. The case involves two Melbourne bicycle riders and a Sydney delivery driver.
Determining if a worker is an employee or contractor is complex, as no single factor applies. The entire relationship must be assessed, and misclassification can result in fines of up to $54,000 per sham contract.
If you need assistance, call ABILITY GROUP on 02 9098 5500.
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Source: Foodora rider flights dismissal from food delivery service
Title: ABC News
Read time: 2 mins