Government launches contractor guide

The Federal Government is launching a free handbook to ensure independent contractors are aware of their rights and responsibilities before they begin operating.

The handbook, titled ‘Independent Contractors: contracts made simple’, is a quick reference guide with links to relevant websites and phone numbers.

Small Business Minister Nick Sherry said in a statement the handbook had been produced in consultation with metropolitan and regional independent contractors.

“Getting the contract right at the start is the best way to improve business relationships and avoid disputes down the track,” Sherry said.

The Government has also launched a revised, updated version of ‘Independent Contractors: the essential handbook’ and its audio version. 

“The new audio version of this very popular publication is ideal for listening on the go, as contractors can download it to their computers, iPods or MP3 players,” Sherry said.

According to a government spokesperson, the entitlements and obligations of independent contractors are unique and therefore need to be fully understood.

“Independent contractors run their own business, hiring out their services to other businesses and organisations. Unlike most employees, independent contractors negotiate their own fees and working arrangements, and can work for a variety of clients at one time,” the spokesperson says.

“If you have specific expertise, independent contracting can be an ideal way of capitalising on your knowledge… [The handbook enables you to] save time and money by being aware of your rights and responsibilities before contracting.”

The handbook outlines what is involved in a contracting relationship, how to negotiate a contract and what to include, and the laws affecting a contract.

According to the spokesperson, it is sometimes difficult to determine whether you are an independent contractor or an employee, particularly if you only provide your services to one client.

“Cleaners and IT professionals, for example, may fall into either category depending on the circumstances of their engagement,” he says.

“The difference is important because different laws and mutual obligations apply to each type of relationship.”

“You could easily be an independent contractor for one job and an employee for the next. This is often the case in the building and construction industry.”

“It is important to understand that an independent contractor is subject to different tax, insurance and superannuation requirements.”

The guide can be downloaded here.