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Independent contractors

Last updated July 2024

This chapter explains when a work relationship is an independent contractor engagement and outlines the laws that apply when you engage an independent contractor.

Engaging independent contractors

Definition: Independent Contractor

An independent contractor is a person who conducts their own trade or business by providing services under terms set out in a contract. Independent contractors are also known as contractors, dependent contractors, small business operators, sole traders, freelancers or entrepreneurs.

You may engage independent contractors under the following contract arrangements:

  • limited access contracts, e.g. to deliver goods or repair equipment;
  • labour hire contracts, e.g. a temporary worker contracted to your business during an employee’s absence;
  • short-term project contracts, e.g. a graphic designer contracted to design your company logo; and
  • major contracts involving large expenditure and long periods onsite, e.g. a 3-year public works construction project.

Sole traders and freelancers are individuals who provide their services as contractors directly to you. This means your contractor agreement is with the individual worker, not with a company or partnership controlled or associated with the contractor.