Independent contractor vs employee classification review checklist
Worker classification has shifted substantially since the 2022 High Court decisions and the 2024 Closing Loopholes amendments. This checklist is for Australian employment lawyers reviewing contractor engagements for sham contracting, super, and the new whole-of-relationship test.
This is a 12-step checklist for classifying a worker as an employee or independent contractor under the Fair Work Act 2009 (as amended by the Closing Loopholes reforms), superannuation guarantee, and the multi-factor test following CFMMEU v Personnel Contracting (2022).
The checklist
Identify the engagement and written contract
Gather the contractor agreement, any variations, and the work actually performed. Confirm who are the parties.
Apply the new whole-of-relationship test
From 26 August 2024, classification under the FW Act uses the real substance, practical reality, and true nature of the relationship.
Check whether the worker opted out
If the worker earns above the contractor high income threshold and has given an opt-out notice, the old contract-based test applies.
Apply the common law multi-factor test
Apply the CFMMEU v Personnel and ZG Operations factors — control, integration, tools, risk, delegation, and hours.
Check superannuation guarantee exposure
Even a true contractor may be an employee for super under section 12(3) SGAA if engaged principally for their labour.
Consider PAYG and payroll tax
Review PAYG withholding voluntary agreements and state payroll tax relevant contract provisions.
Assess sham contracting risk
Check the employer did not misrepresent employment as contracting under section 357 of the Fair Work Act.
Review the new unfair contract terms jurisdiction
Contractors earning below the high income threshold can now apply to the FWC to set aside unfair terms.
Check regulated worker (gig / road transport) status
Determine whether the worker is a regulated worker or road transport contractor subject to minimum standards orders.
Review workers compensation coverage
Apply the state Act deemed worker provisions (e.g. NSW Sch 1) to confirm WC cover.
Calculate contingent entitlements
Estimate leave, notice, super, and PAYG payable if the worker is reclassified as an employee.
Advise on rectification and agreement redrafting
Where classification is wrong, advise on backpay, super, and a new properly drafted contract or employment transition.
When this checklist applies
Use when onboarding any contractor, on a Fair Work or ATO audit, or when a worker claims entitlements after engagement ends.
Common pitfalls
- Relying on the old contract-based test after 26 August 2024
- Assuming super does not apply to a contractor paid for labour
- Missing the regulated worker minimum standards regime
- Ignoring state payroll tax relevant contract provisions
- Weak sham contracting evidence — director liability under s 550
Run this checklist on a real matter
Quillio runs the whole-of-relationship test, calculates reclassification exposure, and drafts contractor agreements aligned to the 2024 rules on a live matter. See /practice-areas/employment-lawyers or start a free trial.
General guidance for Australian contractor classification post-Closing Loopholes. Adapt for professional services, construction, and interstate engagements.
Use this checklist on your matter.
Quillio can run this checklist on a specific NSW conveyancing matter — confirm each item, calculate adjustments, and generate the supporting documents. The free trial requires no sales call.
Start your free trial