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Are they an employee or a contractor?

Posted on September 3, 2019 by admin

Employers that incorrectly treat employees as contractors can face hefty penalties and charges as well as claims for entitlements and superannuation contributions. Even if employers are only hiring someone for a few hours or a couple of days at a time, it must be established whether they are employees or contractors to get tax and super requirements right.

When hiring an individual, it is the details within the working agreement or contract that determines whether they are a contractor or employee for tax and super purposes. The agreement or contract the business has with the worker can be written or verbal.

Workers such as apprentices, trainees, labourers and trades assistants are always treated as employees. In most cases, apprentices and trainees are paid under an award and receive specific pay and conditions. Employers must meet the same tax and super obligations as they would for any other employees of the business.

Companies, trusts and partnerships are always contractors as an employee must be a person. If a company, trust or partnership has been hired to work, then it is a contracting relationship for tax and super purposes. The people who actually do the work may be directors, partners or employees of the contractor.

Sham contracting arrangements, where an employer attempts to disguise an employment relationship as an independent contracting arrangement, are illegal and breach the Fair Work Act 2009. Employers who engage in sham contracting arrangements can face serious penalties for contraventions of these provisions. The courts may impose a maximum penalty of $54,000 per contravention.

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Conducting your business’ health-check

Posted on May 28, 2020 by admin

With the current economic slowdown, now is the perfect time to review your business strategy and conduct a business “health check” to come out the other side improved and ready to go. Analyse whether or not your business is in the state that you want it to be in and any improvements you can make to prepare for when the economy starts to recover.

Clients and customers

Client and customer loyalty is a trait all businesses should appreciate, but if your clients’ values are misaligned with yours, conflict is inevitable. Hence, now is the time to re-evaluate which clients you want to keep loyal and which ones you can see a cooperative future with. Re-assessing your target audience and deepening your understanding of the wants and needs of your clients would also be beneficial, as you can perfect your marketing strategies now while you have the time. If you have clients who frequently struggle to pay you on time, rude to your service and employees and generally disrespectful to your business, take the time to assess whether your attention is worthwhile and if you would like to continue to work with them when the economic situation improves.

Employees

Your employees are another stakeholder to check up on during this downtime opportunity. Your employees will always be your business’ representatives so make sure they are up to standard and help them improve on their skills now when they have the time to. Take the time to teach your employees more about your business goals and strategies and improve the team atmosphere by introducing team recreational activities. Your relationship with your employees now during a global crisis will dictate how they feel about you as a leader and if they can rely on you in the future. Foster respectful, strong and healthy bonds between you and your employees and only good things will be coming your way.

Suppliers

The key question to ask when reviewing your suppliers is whether or not you are getting what you need from them at a reasonable cost. Of course, not all sales deals are made equally and while you may get the bad end of the stick now, that is sometimes for the benefit of the long term. However, if this is not the case and you feel that your suppliers are asking too much from you, letting you down with their product quality or causing other complications, take the time now to look for other options. As most businesses struggle through current economic conditions, more and more suppliers are becoming competitive and hence, there are more options to consider. Do your research and decide on the suppliers you want to work with for the long-term future.

Financing

Managing your finances is always a difficult task but it is now more important than ever. Your budget and profit predictions for this year are likely going rogue so reevaluate your finances and research other funding options such as commercial rent, interest rates and banking services. Consider how you can minimise cost while maximising efficiency and productivity, save as much money as you can during these downtimes, and review your investments in detail to determine whether or not they are worthwhile.

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