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Confused about the difference between a worker and contractor? It’s not always easy to know which is which, but it’s important to get it right, particularly when calculating workers compensation insurance premiums. Knowing the correct status of a worker ensures the correct premium is paid.
It’s a common misconception that if a worker has an Australian Business Number (ABN) they must be a contractor. This is not always true, so when making a decision on worker status it’s important to look at all aspects of the business relationship. You should never rely on one factor alone.
Contractors
Key characteristics include:
- work performed and is made to a registered business entity and not to an individual
- delegates work to offer services to others
- work performed and rectifies defective work at own expense.
Workers
Key characteristics include:
- period of time worked, such as an hourly rate made at regular periods (usually weekly or fortnightly)
- supervision and control of an employer
- employer
- accordance with an employment contract and takes no commercial risk
- be subcontracted to others
- specifically agreed
- annual and long service leave.
Call 13 10 50 or visit workcover.nsw.gov.au/workerstatus for more information about worker status.
{Source WorkCover News Issue 79)
Download the full edition here: Workecover news edition 79
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