Risk Assessment Analysis - Engaging Direct Hire Independent Contractors
The most important criterion to be considered in a risk assessment of direct hire arrangements is the relationship between parties.
LIABILITY
If the host employer-contractor relationship is deemed to be a contract for employment under common law rather than a contract for service, the host employer's liabilities could involve:
Taxation
- Penalties for not deducting appropriate tax
- Retrospective requirement to PAYE tax liability for employee
- Contractor exposure to an employment relationship
- Penalties for failure to meet Superannuation Guarantee liability
- Retrospective requirement to meet superannuation liability for employee
- Penalties for failure to meet pay-roll tax liability
- Retrospective requirement to meet pay-roll tax liability.
Workers' Compensation
- Penalties for not making payment to relevant authority
- Retrospective payment for premiums
- Exposure to a claim not supported by the Workers' Compensation Insurance Authority.
Employee Entitlements not Previously Paid to Independent Contractors
- Annual Leave
- Public
- Holidays
- Sick Leave
- Long Service Leave
- Redundancy
- Leave Loading
- Maternity Leave
- Paternity Leave.