I joined James Crook on The Business of Massage and Wellness Podcast for an insightful discussion about the distinctions between contracting and employment in the allied health industry.

In Episode 50 of their podcast series, we offer valuable guidance for massage therapists and practice owners trying to navigate the complexities of HR and employment.

Changes to the Fair Work Act

In our conversation, we explored how the Fair Work Act has evolved, leading to stricter definitions and regulations around subcontracting and employment. It’s crucial for health professionals to understand these distinctions, as misclassifying workers can result in significant penalties. We talked about the factors that differentiate a contractor from an employee, such as control, use of equipment, risk, and the ability to delegate work. These distinctions are not just theoretical; they have practical implications that can impact your business and compliance status.

Guidance from the ATO relating to Contractors

A particularly useful tool we discussed is the ATO’s decision tool, which helps clarify whether a worker should be classified as a subcontractor or an employee. If this tool doesn’t validate a subcontracting arrangement, it typically indicates that an employment relationship exists. This tool can be a valuable resource for making informed decisions and avoiding potential legal issues.

When is Contracting Legitimate?

We also touched on what constitutes legitimate contracting. For instance, genuine contractors operate their own businesses, manage their own clients, and have the freedom to take those clients with them if they leave. On the flip side, misclassifying workers can lead to complaints and ATO audits, which can result in substantial financial penalties for businesses. Understanding these nuances is essential to ensure that your contracts and employment practices are both legal and effective.

What are the penalties for Sham Contracting?

Another significant point was the potential penalties imposed by the Fair Work Commission for underpayment claims. The maximum penalty can reach up to $63,000 per worker, which could be financially devastating, especially for smaller businesses. Therefore, it’s crucial to stay informed about your obligations and ensure compliance to avoid such severe repercussions.

The Health Professionals and Support Services Award

We also explored the Health Professionals and Support Services Award 2020, which provides a comprehensive pay structure for various health professions, including massage therapy. This award outlines different levels and pay points based on experience and education, helping employers set fair and competitive wages.

Casual vs Permanent Employment

Casual employment was discussed as a common choice for new businesses due to its flexibility and higher hourly rates. However, part-time employment can attract higher-quality therapists by offering stability and guaranteed hours. It’s important to document any transitions from casual to part-time employment to protect against potential claims.

Making sure you have Profitable Practitioners

Lastly, we talked about the importance of pricing services appropriately to sustain business operations and maintain profitability. A minimum charge of $100+ per hour is recommended to ensure that businesses can support competitive wages and continue to thrive.

For those looking to connect with a supportive community, we also encouraged joining the Massage Business Support Network on Facebook. This private group offers a platform for discussing business topics and sharing insights with over 5,000 members.

To save you time we’ve summarised all the key information you need to know about employing. Head to the link below to grab a copy.