Employee or independent contractor

This page is for: 
Employee / workerEmployer

WA image icon  This information is only relevant to employers and employees in the WA state industrial relations system.

An independent contractor is not an employee, but rather a worker running their own independent business. They are also sometimes referred to as a ‘contractor’ or a ‘subcontractor’.  

The Industrial Relations Act 1979 prohibits sham contracting. A ‘sham contracting’ arrangement may occur where an employer knowingly disguises an employment relationship by telling an employee that they are being hired as an independent contractor when they are really an employee. Visit the Prohibition on sham contracting page for more information.

The table below provides an overview of the main differences between employees and independent contractors.  

It is recommended that you seek legal advice if unsure.

Some factors indicating whether someone is an independent contractor or employee
Contractor Employee

Worker has entered into a written contract with another party and agreed to be engaged as an independent contractor

Worker has accepted a written employment contract from an employer and agreed to be engaged as an employee
Usually in control of the hours worked and when and how the work is performed The employer is in control of how and when work is performed
Can generally accept and perform work for more than one party The employee is an integral part of the business and will usually be working for that business on a regular and ongoing basis
Provides a rate for a specific job and an invoice for work performed The employer pays the employee in accordance with the relevant WA award, or contract of employment
Paid on the completion of a task Paid on an ongoing basis
Often supplies their own plant, materials and equipment The employer supplies the employee with materials and equipment
Responsible for their own tax and superannuation arrangements The employer is responsible for tax and superannuation and workers' compensation for the employee
Presents as their own enterprise

The employee represents somebody else's business



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