DO YOU NEED AN INDEPENDENT CONTRACTOR AGREEMENT?
The engagement of an independent contractor can be a "minefield" for the ill advised. Generally, the whole purpose of engaging an independent contractor is to have them conduct a specific task or purpose rather than entering into an employment relationship with them. Unfortunately, there are numerous cases where an independent contractor has ultimately been deemed to be an employee. Consequently, the party who engaged the independent contractor is then liable to pay employment entitlements, all because the correct advice was not sought prior to the commencement of the relationship.
Accordingly, we believe it is extremely important that all Companies ensure that their commercial arrangements are formalised appropriately to reduce the risk of the independent contractor being deemed to be an employee. There are various ways in which this can be achieved, the first step being the preparation of an independent contractor agreement.
Are Independent Contractor Agreements regulated?
The independent contractor relationship is subject to various regulations, such as the Independent Contractor’s Act 2006 (Cth) (‘the IC Act’), where one of the parties to the relationship is a Constitutional Corporation. The IC Act, which commenced on 1 March 2007, protects the status of Independent Contractors and encourages independent contracting as a wholly legitimate form of work. In this regard, we note that the IC Act, like other Commonwealth legislation, seeks to override State laws and we therefore suggest you contact us for further advice if your Company is not a constitutional corporation.
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