The legal requirements for a Not For Profit in dealing with staff and independent contractors are the same as for any employer. There are some differences between employees and independent contractors and their rights are protected under different Acts.
How do we know if our workers are employees or independent contractors?
The main differences between employees and independent contractors will be to do with how they are paid, what benefits they receive and how they approach the work. The PilchConnect website maintains information about volunteers, employees and contractors, including the differences between them and legal issues you need to consider.
- see The people involved on the PilchConnect website.
The ATO Website has detailed information about your responsibilities for volunteers, employees and independent contractors and has information to help you understand the differences between these different types of workers for tax purposes.
- see the Employees, independent contractors and volunteers page on the ATO website.
Employees – at a glance
- relevant Acts: employees are covered under the Fair Work Act 2009 (Cwth) and Long Service Leave Act 1992 (Vic). The Fair Work Act defines minimum standards of employment, known as the National Employment Standards (NES)
- the work: an employee has a defined role within the organisation and does the assigned work under the control, direction and supervision of the employer. They work hours set by the employer, a workplace agreement or an industrial award
- entitlements: an employee is entitled to paid and unpaid leave (e.g. sick leave, personal/carers' leave, annual or recreation leave, or long service leave)
- payment: an employee is paid for time worked and is paid regularly, e.g. weekly, fortnightly or monthly. As the employer you will need to withhold income tax from the employee’s pay
- insurance: an employee is not responsible for insurance. they are covered by professional indemnity, public liability and workers compensation insurance premiums paid by the employer
- superannuation: an employee is entitled to have superannuation contributions paid into a nominated superannuation fund by their employer
- tools and equipment: you would generally need to provide an employee with the tools and equipment they need to do their work.
The Fair Work Commission website has detailed information about employee entitlements and should be your first point of reference.
- visit the Fair Work Commission website.
Who can help if we have a dispute?
The Fair Work Commission is the national body concerned with workplace relations and they operate under the terms of the Fair Work Act 2009. They can assist with resolving disputes between employers and employees.
- visit the Dispute resolution section on the Fair Work Commission website.
Do we need to do background checks?
When recruiting workers of any sort for your organisation, there may be some legally required background checks, as well as other checks that are recommended as part of the organisation's duty of care. For example, if you have not completed background checks the organisation may be liable for damage incurred by someone working for your organisation.
There are few hard-and-fast rules about background checks. The decision has to be about the risk that applies for your organisation. You should take special care if employees or independent contractors are working with children, the elderly, people with disabilities or if a volunteer will have responsibility for finances or driving a vehicle.
Note: A Working with Children Check is a legal requirement for workers who will have contact with children during the course of their work with your organisation. The Working with Children Check is administered by the Department of Justice (DOJ).
- see the Who needs a check page on the Working with Children Check website.