Date published: 27 August 2025 | Author: Nina Rossi

From 26 August 2024, changes to the Fair Work Act made it more difficult to engage contractors as independent workers, with such persons now potentially to be treated as employees, therefore also entitled to employee entitlements like holiday leave and payment of superannuation.

Until now, if both parties agreed to a contractor arrangement in writing, that was often enough to establish a contractor relationship. Under the new rules, however, the law looks at the substance of the relationship, not just the contract. 

If the person is working like an employee, they may be treated as one, regardless of what the paperwork says. 

Key indicators include: 

• Control over when, where or how work is done
• Provision of tools, equipment or uniforms
• Payment by the hour instead of per task
• Limits on the contractor’s ability to refuse work or subcontract it 

If someone is reclassified as an employee, the business may become liable for superannuation, leave entitlements, unfair dismissal protections, and possibly even backpay. 

Although these changes are intended to protect gig workers, any business engaging individuals as contractors should now carefully review their hiring arrangements. Check that your contractors are genuinely operating independently, both in form and in practice. If not, it’s time to act. 

Now is a good time to review your arrangements. Make sure they reflect a genuine contractor relationship, both on paper and in practice. Contact Rossi Law today to get the clarity and advice you need to move forward, or explore our Business Law services to learn how we can support your compliance.

This blog is based on a video recorded by Rossi Law. It was first drafted with AI assistance and reviewed and updated by Rossi Law before publication. It provides general information only and should not be considered legal advice. Please seek advice for your specific situation.