Is a client of yours engaging contractors who are really employees??I read a report recently written by a Sydney based legal firm. It was interesting as they asserted that when a worker was regularly engaged to provide principally or wholly labour based services, the individual was unlikely to be a contractor unless they meet the following basic criteria.I have paraphrased the commentary so it is somewhat simplified. • A contractor advertises their offer proactively on social media or elsewhere under their own individual signage and branding.• From this advertising a contractor is able to demonstrate that they have generated enquiry and clients via these efforts.• A contractor has an extensive client and revenue base. • A contractor quotes for work with a unit price and is not paid hourly, daily, piece (percentage) or a commission rate.• A contractor includes a more than nominal mark up on any materials they supply. • A contractor contributes significant equipment to the task i.e. tailor- fitted vehicle, backhoe etc.Where the worker is providing labour based services and in the absence of comprehensive indicators like these, the questions arises as to their real status – are they in fact employees?In spite of the individual invoicing via an ABN, Company or Trust, or having an independent contractor agreement in place there is a significant risk of non-compliance.This means there is exposure under various regulations such as the Tax Act, the Personal Services Income (PSI) legislation and the SHAM contracting provisions of the Fair Work ACT if the individual is actually an employee. There is a better, safe and secure way to engage labour based contractors which is robust, tested and lawful and it doesn’t attract the ire of the ATO or the Fair Work Ombudsman.While this is not legal advice we offer a no obligation, free of charge contractor or status review to any clients of NCP members.