Are you confident that you have correctly identified and categorised workers in your organisation? Employees, independent contractors, and volunteers each come with different legal entitlements and obligations. Misclassification can result in your organisation not meeting legal requirements, confusing workers about their roles, and even facing penalties or legal claims.
his article will guide you in understanding the distinct attributes of each category, helping you make informed decisions and maintain compliance.
Different legal entitlements apply to different categories of workers in your organisation.
This is shown in the table below:
Why is it important to distinguish between different kinds of working relationships?
If your organisation incorrectly classifies a worker:
• you may fail to give the worker their legal entitlements or meet your obligations under law
• the worker may be confused about their own obligations and legal entitlements
• legal claims could be made against your organisation, and your organisation may be liable
to pay penalties
How to distinguish
The table above can help you to decide which category your workers fall into.
Whether a person is a volunteer, employee or independent contractor requires consideration of different elements, because each category of worker has different attributes.
The law recognises different categories of relationships where one party (a worker) performs work for another party in exchange for payment or reward.
These include the relationships of:
• employer and employee, and
• principal and independent contractor
The law also recognises a separate category of worker known as a 'volunteer'. This type of worker performs work for another without an expectation of, or legal requirement of, payment or reward.
In particular:
• your organisation can be legally responsible for both the safety of its volunteers and the consequences of their actions (so you need to know who they are and what they are doing)
• a volunteer should understand the basis on which they are engaged (so they are aware of their legal entitlements and insurance and safety risks)
• whether someone is covered by your organisation’s insurance may depend on their status (category of worker), and
• some laws apply differently to volunteers and some laws don’t apply at all
If you have concerns about this topic, or are not sure which category your workers fit into, send me an email at sandra@hrconsultingtas.com.au.
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