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Am I a Working Subcontractor?

The CoINVEST portable long service leave scheme works differently for workers and working subcontractors.  CoINVEST cites common law to determine whether one is classified as a worker or a working subcontractor.

Complex arrangements often exist. Hence each case is determined on an individual basis

Subcontractor or Working Director?

CoINVEST defines a Subcontractor as an individual who is performing work covered by CoINVEST operating under a a Sole Trader or Partnership ABN. Subcontractors must register themselves and their business with CoINVEST and may make optional contributions to build up their Long Service Leave credits.

If you are operating under a company ABN then you are classed as a Working Director and employee of your own company – For further information please continue to Employer Obligations.

If you are operating under an ABN which relates to a Trust entity, please see Employer Obligations and Working Directors to determine whether you are classed as a Working Director of your business or Working Subcontractor.

Subcontractor or Worker?

If you work under your own sole trader or partnership ABN but work almost exclusively for one client and are not free to do jobs for anyone else, that client has an employer-employee working relationship with you and they would therefore be required to record long service leave credits with CoINVEST on your behalf.

Here is a list of attributes to look for to decide whether you, or your employee, are a working subcontractor or worker under CoINVEST rules. These serve as a guideline only – if you need assistance with this please email us at info@coinvest.com.au

Worker Working Subcontractor
A period of continuous work for one employer suggests an employee relationship Will work for a number of different clients, not just one employer
In law, a ‘Master-Servant’ relationship exist

i.e. the employer is responsible for superannuation, redundancy payments, sick pay, overtime allowances, WorkCover etc

Person is a separate business entity (not including incorporated/Pty Ltd)

A contract exists specifying the total outcome and amount to be paid

Entitlements are the person’s own responsibility

Employer may exercise control over employee’s hours, work methods, etc.

There is direct supervision

Person is responsible for their own hours and work methods and must make good any faulty work
Person does not have the ability to enter into contracts, advertise for work or submit quotes without reference to the employer Person is free to enter into contracts without reference to anyone else, can advertise for work or enter into a new contract
Bears no financial risk and receives no gain apart from specified daily, hourly, weekly or piece rate Person is responsible for own financial risk
Provides tools limited to their own trade – no machinery Generally responsible for all tools, machinery, materials etc. including order, delivery and transport
Person will be paid on a regular basis in a defined manner, e.g. a specific rate per hour or piece rate Aside from any agreed instalments, the person will be paid per job, or per job stage (“Price Per Job”)