New definitions of ‘employee’ and ‘employer’, one of the key changes under the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 starts from 26 August 2024 or an earlier date set by the Australian Government.
To determine whether a person is an employee or a contractor it will no longer be sufficient to simply look to the terms of the written contract.
Employers must “ascertain the real substance, practical reality and true nature of the relationship”
which requires an assessment of:
There will be some exceptions to the application of the new definitions. This includes that certain workers will be able to ‘opt out’ of being employees through a notification process if they earn more than the contractor high income threshold. The contractor high income threshold hasn’t been set yet.
Employers also need to be aware that ‘back-pay’ for unpaid entitlements may start accruing from 27 February 2024.
Want to find out more? Rest assured we are going to do a deeper dive into the Right to Disconnect plus other key changes to the Fair Work Act — join our webinar here.
You can also call the Business Advice Hotline on (08) 8300 0000 (select option 1) if you are a South Australian Business Chamber Member.
