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Putting someone on - casual employee vs sub contractor

Discussion in 'Human Resources Management' started by Kinnon, 31st Oct, 2016.

  1. Kinnon

    Kinnon Member

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    29th Aug, 2016
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    Location:
    Cairns
    Hey All,

    We're looking a bringing someone into our Handyman business on a fulltime basis to do it it is where the question is - as a casual employee or as a sub contractor.

    I've spoken to people who are for and against both sides but having no practical experience it would be good to hear some more opinions.

    FWIW, as a subby he would come under PSI from what I've read so would be paying super etc

    TIA!
     
  2. Moyjos

    Moyjos Member

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    Location:
    Caloundra, Qld
    We employ our boys on a casual basis but at arms length through an HR company. We use Workplace Central | The Service Centre for Workplace Relationships
    They are available Australia wide, but you might have a local compan.

    Advantages: we are a "host employer" which means we never have any HR hassles. If we don't want the staff member we just inform workplace central that they are no longer required. There is no need for any reason. The HR co does an OHS audit each year to make sure we stay compliant. They look after work over and super. All I have to do is submit the time sheet (online) each week.

    Disadvantages: it costs a little more. (Or does it ). The HR co loads the wage by approx 8% the 8% on top of the base wage covers work over, super and their profit.

    I love that I do not have to keep on top of the crap that is HR. The rules change so often.
     
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  3. Kinnon

    Kinnon Member

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    Thanks for that Moyjos - will keep them in mind for down the track. In this particular instance we already know who we will be 'hiring'.
     
  4. Moyjos

    Moyjos Member

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    That is fine. I choose all our staff, workplace central just administer the HR side going forward.
     
  5. bob shovel

    bob shovel Active Member

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    If you already know you'll just have to weigh up the responsibilities for each side plus the work load you'll have - subby may be easier to send them home if there's not much on.
    But also job security for the employee and employee security for you guys. Casual would feel more like "part of the family" although abn you can give them plenty of work and still have the same rapport. It may be easier for them to go off elsewhere if something else came up but it depends on who you're looking at hiring

    Your current structure may change - sole trader to company. Does your accountant have any input or other handymen you know?
     
  6. Kinnon

    Kinnon Member

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    After quite a bit of reading I think to begin with we will go with contractor then perhaps later on down the track (new FY?) change to a casual employee structure.

    Aaron is booked out for the next 2-3 weeks (and bookings into week 4) and with the amount of work he's knocking back I'd say we'd have just about another FTE workload to hand off from the get go. And that is without any advertising or proactively looking for work so there seems to be a lot of potential there. We want them to work autonomously but also feel and be part of the family.

    I've spoken to people in and out of the industry and it's mixed input from both!
     
    bob shovel likes this.
  7. bob shovel

    bob shovel Active Member

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    It may just come down to personal preference with you and each employee

    Wow! That's great he's so busy! What work is he getting? Is he specialising in any way or is there just a shortage of good help and more people starting to spend?
     
  8. Kinnon

    Kinnon Member

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    Yep, that's what we're thinking. We're going to have them over for dinner in the next couple of nights and just talk it out and come up with a game plan that suits everyone. The bloke is one of Aaron's mates, which is worrisome enough as it is, but at least that relationship is there already.

    It's really a mix of private, body corp, commercial and real estate. I think the opposite of not specialising in one particular thing is what's working! A good 60% of work is repeat business where he's done one job (sometimes something small, almost like they're testing you to see if you're decent) then ask "can you do this....or this...what about this?" and most of the time the answer is 'yes'. One client has a shop in a local shopping centre and the first job Aaron did was hanging a couple of decorative antique door knobs on the wall and quite a few jobs later our last one was a shop fitout after they moved shops.

    I think what's working for us is a combination of several things - actually turning up, and on time, to do the quote or job, reasonable prices (too cheap?), doing a good job, tidying up afterwards, a half decent website with examples of our work, near the top of first page of google for several different search terms, well presented and probably a few other things that aren't coming to mind but the above is the feedback we get from clients.
     
    bob shovel likes this.
  9. BennElnEz

    BennElnEz New Member

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    Just need to be careful that you don't fall foul of the ATO's employee vs contractor issues. Super is the main one that people try and avoid by making people contractors so good on you for reading up on the issues.

    In SA, you can also have Workcover obligations for contractors so I would be checking that one out too.

    Having said all that, if you are liable for workcover and super, what is the benefit of taking him on as a contractor as opposed to a casual employee?
     
  10. Kinnon

    Kinnon Member

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    Yep, that was one of the considerations. I spent quite a bit of time reading the different ATO pages and made use of the Employee vs Contractor Decision Tool and by my answers to that it said that he would be a contractor.

    This:
    "Provided your responses accurately reflect the working arrangement, you can
    rely on the result provided by the tool.
    This is a record of your genuine attempt to understand your obligations for your
    worker and would be considered if we review this working arrangement in the
    future."

    Is reassuring too. We have no issues with paying super or work cover but want to make sure we do it right.

    One of the considerations is cash flow and ownership - ie the buying of materials, supplies, fuel, tools etc and whose responsibility that is. If contractor does it then that's something he covers vs employee where we are responsible and supply everything.
     
  11. bob shovel

    bob shovel Active Member

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    I have spoken to a mate who went out in his own doing similar and spoke with a builder i know and they both said the same! Showing up, well presented, returning calls and you'll get the job!

    That's great he's doing well! Keep it going! Are you also factoring in if he is to get a lot more work or a big job comes up how that will be managed? Having half the guys employees and half subbys could get potentially messy? ? Depends on how you divide the work up and engage them but something to consider
     
  12. Kinnon

    Kinnon Member

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    Yep! Pretty sure not many business owners in Cairns actually want work.... which is awesome for us! We've also found people from other trades that are great too so hanging on to them.

    Yeah, it will be a case of all or nothing ie all as casual employees or all as subbies. Re the big jobs if he needs help with something then he'll just get subbie to invoice him for his hours worked, same with casual.

    And if he continues to get more work than he can handle then we'll just keep juggling it like we are now. I've been known to be out on the 'tools' and talking with banks and submitting docs at the same time (I should say that's if no-one is home/onsite and I certainly don't charge for the time I spend doing other stuff) :D

    Ordered proper uniforms today so goodbye high vis shirts!
     
    bob shovel likes this.