Why is the difference between employees and independent contractors important?
Employees have statutory entitlements to minimum wages and conditions. Employers must deduct PAYG tax from remuneration paid to employees. Employees may also have rights to challenge their dismissal. This is not the case for contractors. In many areas, however, the obligations of a person using the services of a contractor (principal) as opposed to an employee are the same. The obligation to provide the worker with a safe workplace is the same. In some cases, the principal must ensure that the contractor is covered by a workers’ compensation policy. In other cases, the principal must make Superannuation Guarantee contributions on behalf of the contractor.
