Contractor or Employee? Tips for Employing Contractors

Engaging contingent labour purely to save costs is fraught with risks, so employers should ensure they use contractors for the "right" reasons, and take adequate steps to protect themselves against potential claims. For some employers, they can face a significant risk of being deemed the "employer" of a contractor if care is not exercised.  

 

Of concern to many businesses is being found liable for entitlements associated with employment, including annual leave, superannuation and personal leave, along with exposure to unfair dismissal laws, and longer notice periods.
It doesn't matter whether your business has explicitly engaged a worker as a contractor, the law will disregard that if the nature of the relationship otherwise bears the features of an employment relationship.

To minimise risks in this area it is recommended  to ensure that contractors are engaged "for the right reasons. One of the "wrong" reasons is to save on rates of pay, a common example of this is the engagement of contract cleaners. Contract cleaners have specific minimum rates of pay under applicable modern awards . There have been businesses found attempting to save money by engaging their cleaners as contractors, so as to avoid the minimum hourly rates of pay under awards. 

Another “wrong” reason is simply because ‘that's what the worker wants’. It can be attractive from a taxation view to be engaged as a contractor, as opposed to an employee, but a worker who at the commencement of a relationship requests to be regarded as a contractor, may change their mind at a later date and  attempt to subsequently claim the entitlements associated with permanent employment.

Employers should always record the nature of engagement in a ‘solid’ contract that sets out and provides evidence in relation to why it is a contractor arrangement as opposed to any other sort of arrangement, and details of how the contract came about.

Another critical mistake that businesses can make in written contracts is to use the word 'employment' or 'employ' when they're talking about someone who they've deemed to be a contractor. A business that engages contract labour is not an ‘employer’; they are a ‘principal’. Someone who works under those arrangements is ‘engaged’, not ‘employed’, and not an ‘employee’;  they are a ‘contractor’.  Inadvertent use of the wrong terminology can cause issues should the matter be investigated.

Further tips for minimising liability include:

• Avoid giving contractors entitlements associated with an employment relationship such as 4 weeks annual paid leave. This is an employment entitlements and can cause the relationship to look like an employment relationship.
• Try to avoid specifying an hourly rate, as being paid an hourly rate is regarded to be consistent with being an employee
• Avoid long-term arrangements, as when an arrangement continues for several years, and that work is of a sort that you would get from an employee then you could wind up with the types of liabilities associated with employment
• Always review the arrangement on a regular basis – there is no ‘set’  amount of time when a contracting arrangement should be reviewed, but reviews should take place.

Managing High employee sick leave

Real Life Case Study - Managing High Employee Sick Leave

In our latest December newsletter we were excited to add a new section -  a real life case study of an End2end Business Solutions success story.

Managing High employee sick leave

I am currently working with a client who has an employee who is constantly taking sick leave and obtaining doctors certificates.  The employee is part of an administrative team who all share the business' administrative tasks.  In addition to having high sick leave, the employee isn’t a team player, only completes the bare minimum of work and the work is of poor quality.  Left unchecked, this has caused angst and low morale with the other workers.    Initially I thought this was a training issue, however, I decided to investigate the sick leave records to determine if I could find a pattern.   Sure enough, this part-time employee would fall sick on the last 2 days of a period, often just before long weekends or end of month when it was busy, creating a week's leave regularly for themselves. 

My next step was to organise a meeting with the employee to present my findings and gain input from them on how this situation could be satisfactorily resolved, with the ultimate aim of the employee taking ownership of the medical condition instead of making it a problem for the employer.   In this meeting I found that the employee needed to work, but was not completely happy in this job. 

The solution has been that the employee will be returning to the doctor to have the medical condition managed properly and action taken.  The worker is also working to make up for time lost and help their fellow team members.  The final step will be to get the employee feeling engaged as part of the team and not as though it is a chore to be at the employer.   Regular communication with this employee has helped in letting the employee know that someone is aware and is ready to help. 

As an employer, don’t leave high sick leave unchecked, there may not always be a pattern, however, it is important to address it with the employee by offering to help solve the issue they may have, and getting the employee to take ownership of the problem.   If it is an attitude problem that is causing the high absence level, work to find out what the underlying issue is and take steps to re-engage the employee.
 

8 Qualities of Remarkable Employees

Are you looking for remarkable employees? What qualities should you be looking for to find the employee who will go the extra mile? We liked this article by Jeff Haden:

8 Qualities of Remarkable Employees, Jeff Haden

Forget good to great. Here's what makes a great employee remarkable.

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Great employees are reliable, dependable, proactive, diligent, great leaders and great followers... they possess a wide range of easily-defined—but hard to find—qualities.

A few hit the next level. Some employees are remarkable, possessing qualities that may not appear on performance appraisals but nonetheless make a major impact on performance.

Here are eight qualities of remarkable employees:
1. They ignore job descriptions. The smaller the company, the more important it is that employees can think on their feet, adapt quickly to shifting priorities, and do whatever it takes, regardless of role or position, to get things done.
When a key customer's project is in jeopardy, remarkable employees know without being told there's a problem and jump in without being asked—even if it's not their job.
2. They’re eccentric... The best employees are often a little different: quirky, sometimes irreverent, even delighted to be unusual. They seem slightly odd, but in a really good way. Unusual personalities shake things up, make work more fun, and transform a plain-vanilla group into a team with flair and flavor.
People who aren't afraid to be different naturally stretch boundaries and challenge the status quo, and they often come up with the best ideas.
3. But they know when to dial it back. An unusual personality is a lot of fun... until it isn't. When a major challenge pops up or a situation gets stressful, the best employees stop expressing their individuality and fit seamlessly into the team.
Remarkable employees know when to play and when to be serious; when to be irreverent and when to conform; and when to challenge and when to back off. It’s a tough balance to strike, but a rare few can walk that fine line with ease.
4. They publicly praise... Praise from a boss feels good. Praise from a peer feels awesome, especially when you look up to that person.
Remarkable employees recognize the contributions of others, especially in group settings where the impact of their words is even greater.
5. And they privately complain. We all want employees to bring issues forward, but some problems are better handled in private. Great employees often get more latitude to bring up controversial subjects in a group setting because their performance allows greater freedom.
Remarkable employees come to you before or after a meeting to discuss a sensitive issue, knowing that bringing it up in a group setting could set off a firestorm.
6. They speak when others won’t. Some employees are hesitant to speak up in meetings. Some are even hesitant to speak up privately.
An employee once asked me a question about potential layoffs. After the meeting I said to him, “Why did you ask about that? You already know what's going on.” He said, “I do, but a lot of other people don't, and they're afraid to ask. I thought it would help if they heard the answer from you.”
Remarkable employees have an innate feel for the issues and concerns of those around them, and step up to ask questions or raise important issues when others hesitate.
7. They like to prove others wrong. Self-motivation often springs from a desire to show that doubters are wrong. The kid without a college degree or the woman who was told she didn't have leadership potential often possess a burning desire to prove other people wrong.
Education, intelligence, talent, and skill are important, but drive is critical. Remarkable employees are driven by something deeper and more personal than just the desire to do a good job.
8. They’re always fiddling. Some people are rarely satisfied (I mean that in a good way) and are constantly tinkering with something: Reworking a timeline, adjusting a process, tweaking a workflow.
Great employees follow processes. Remarkable employees find ways to make those processes even better, not only because they are expected to… but because they just can't help it.

from:http://www.inc.com/jeff-haden/the-8-qualities-of-remarkable-employees.html?nav=next 

How to retain employees and enhance job enrichment

The Insync Surveys 2012 Retention Review into why employees resign surveyed more than 11,000 employees from 40 Australian organisations over a four and a half year period, focusing on those who left their job between January 2011 and April 2012. It found that lack of job enrichment is the leading cause of staff turnover.

The research found that employees leave an organization or business:

• primarily due to the job itself, and not because of pay or relationships with managers or peers, or
• because of one or more factors, such as job enrichment, interpersonal, structural, home life, & environmental.

                               

The average Australian turnover rate of 18 per cent costs organisations with 100 employees around $1 million every year but they could save around $280,000 annually, by reducing turnover by just five per cent.

To improve your chances of retaining your employees and enhance job enrichment, employers can:

• Provide adequate resources for each employee to perform well. ie IT, communication technology, and personnel training and development.
• Create a supportive corporate culture. This includes peer support networks, supportive management, have a culture that fosters the ability for people to openly share their knowledge
• Ensure a free flow of information, and try to eliminate secrecy.
• Provide enough freedom to facilitate job excellence. Encourage and reward employee initiative by providing adequate recognition, appreciation, and other motivators.
• Provide professional development and skill improvement opportunities. This could include paid education at universities or on the job training.
• Provide job variety. This can be done by job sharing or job rotation programmes.
• Offer meaningful work as part of each role and link each role to the success of the organisation
• Be flexible in how, when and where people can complete their work.
• Have career development plans for your staff
• Ensure that new employees are offered sufficient training and do not overload them with a full workload the minute they walk in the door.

There are also other steps an organisation can take to boost retention and reduce staff turnover such as:

• Ensure that you are measuring turnover, and understanding whether it is the high performers who are departing, or the poor performers.   
• Create enriching and meaningful jobs – this allows organisations to match staff with the right job for their skills and interests, thus reducing turnover
• Be flexible – be accommodating of changing life circumstances - This is the second biggest contributor to staff turnover. Be creative in the use of both short and long-term flexible work arrangements.
• Put a value on transparency – trust and honesty are important in a team.
• Impartiality is also essential to employee retention. Everyone must believe they all have the same chance and every decision must be unbiased.
• Recognise performance – and offer rewards that are not just contingent on a behaviour or result. Think outside the square and consider other types of rewards – access rewards such as discounted insurance or mobile phone packages.
• Where possible, empower staff members to make decisions and take ownership of what they do.
• Conducting exit interviews and regular staff surveys, seeking informal feedback from managers and establishing a retention strategy.

 Reducing staff turnover should not be considered solely a HR issue, all areas and levels of management should give this attention in order to boost employee retention and ultimately help the bottom line of your business. Giving due attention to all areas of the hiring & training process,  actively working to maintain and improve staff morale and having an effective employee retention will go a long way in preventing a high employee turnover.

For help with retention programs, performance reviews, or any staffing issues, please contact Annette at End2End Business Solutions for a customised solution.