Sham contracting

If you have been working as a contractor but believe you are an employee, you may be in a sham contracting arrangement.

A sham contracting arrangement is when an employer attempts to disguise an employment relationship as a contracting arrangement. This may be done to avoid certain taxes and responsibility for employee entitlements such as minimum wages, superannuation, workers' compensation and leave.

Under the sham contracting provisions of the Fair Work Act 2009, an employer cannot:

  • misrepresent an employment relationship or a proposed employment arrangement as an independent contracting arrangement
  • dismiss or threaten to dismiss an employee for the purpose of engaging them as an independent contractor
  • make a knowingly false statement to persuade or influence an employee to become an independent contractor.

Employees and contractors who think they may be in a sham contracting arrangement can request assistance from the Fair Work Ombudsman on 13 13 94. If you work in the building and construction industry, contact Australian Building and Construction Commission on 1800 003 338.

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