Hi [First_name],
Just a quick heads-up from the GoTax team.
The ATO and Fair Work Ombudsman have announced a crackdown on something called “sham contracting.” It’s becoming a major focus for both regulators.
What is sham contracting?
It’s when a business calls someone a contractor but treats them like an employee.
Sometimes this is done to avoid paying things like:
• super
• leave
• workers compensation
• other employee entitlements
The ATO has been pretty blunt about it: if you’re treating workers like employees but calling them contractors, it may be illegal.
Why this matters
The ATO now receives detailed reporting about contractor payments each year through systems like TPAR reporting and payroll data, so it’s easier for them to spot unusual patterns.
If businesses get this wrong, the penalties can be significant — and workers may miss out on things like super, leave and workplace protections.
The takeaway
Most contractors and businesses are doing the right thing.
But if a worker is effectively acting like an employee, simply calling them a contractor doesn’t make it so.
Worth knowing.
Warm regards
The GoTax Team