Know how you are being employed

I am going to talk about the two main ways that people are employed in the outdoor industry: as an employee or as a contractor. There are many other ways of getting paid, but they are not common in the outdoor recreation industry. (For information on the differences between casual and permanent part or full time employment please see this page.)

If you are an employee, your employer has to do the following things:

• provide you with a wage (the minimum amount is set by the Government, but sometimes this is determined in other ways)

• they have to abide by a set of rules called the National Employment Standards (NES)

• they have to take an amount of tax out of that and give it to the Australian Tax Office (ATO)

• on top of your wage, they have to pay superannuation

• they must provide workers compensation insurance for you

• And if you are an employee, you have access to a lot of government and union services if your employer does wrong (eg doesn't pay you or do one of these other things)

If you are a contractor, your employer does NOT have to:

• provide you with a minimum wage of any kind – they can pay you whatever you agree to be paid

• pay any super (N.B. Some contracting does have super paid, but not much. If you are contracted mainly for your labour, that you can't delegate to someone else, and your payment isn't dependent on achieving a specified result, then the entity that contracts you does have to make superannuation contributions for you).

And if you are contractor, YOU have to worry about:

• paying your tax

• what happens if you get injured (workers compensation)

• your retirement (superannuation)

• and you may also have to worry about public liability insurance (for example you must have this if you are subcontracting in a National Park in NSW) and you may also wish to get professional indemnity insurance

• providing your employer with an invoice (generally meaning you have to be set up as a sole trader with an ABN and all that stuff)

• and hardest of all, you have to chase your employer if they don't pay you, and your support services are very limited. (Speaking from first hand experience, it's not fun and very hard to get your money.)

How do you know if you should be a contractor or an employee?

There are two bits of legislation related to this: The Independent Contractors Act 2006 and the Fair Work Act 2009 (long boring reading – but worth it if you are being stuffed around by an employer).

There is a thing called sham contracting. A sham contract is where you should be an employee, but instead you are paid as a contractor. This is illegal, and it is unfortunately common in the outdoor recreation industry. I'm not saying that all jobs in this industry must be employees instead of contractors. In fact I still have a few jobs where I am a contractor, but it is important to know the risks and challenges and what the law says.

There are some questions to ask about your employment to find out which one you should be (This info is available in more detail at: https://www.fairwork.gov.au/find-help-for/independent-contractors). I'm briefly going to run through some different jobs, common employment scenarios, and show you the key questions to figure this out:

The things they ask to decide if you are a contractor or an employee are:

• degree of control over how the work is performed

• financial risk

• provision of tools and equipment

• hours of work

• expectation of work (this one is grey in our industry as we are often employed for blocks of work, but it has to do with the ongoing expectation of employment)

• superannuation (this has changed a little in some contexts, but you should definitely be paid super)

• Tax (do you or do you want to have to pay GST etc? No. You just want your pay packet.)

• method of payment (should be on a fixed pay period, not through the submission of invoices)

• leave (This one is grey too - Contractors don't receive paid leave, neither do casuals. But casuals do receive leave loading (see minimum wage below).

From this list, we’re going to do the following:

• Cross out method of payment, tax and Super.

o These three all kind of follow the others: i.e. if you are a contractor you will pay it and if you are an employee they will pay it.

• If you are a casual employee, then cross out leave (you don’t get leave, you get a “leave loading” on your pay instead – more on this later)

• If you are a casual employee, then cross out expectation of work. (N.B. Many employers give you big chunks of work that feel like they meet the expectation of work requirement but it doesn't actually) (Additionally, there are now clauses around "casual conversion" if you do have ongoing expectation of work.)

So we are left with the following:

• degree of control over how the work is performed (does your employer tell you what river to paddle or which mountain to climb or do you get to choose?)

• financial risk (do you bear the risk for making a profit or loss on your job? No.)

• tools and equipment (do you provide all the tools and equipment for activity?) (This area is particularly confusing because many employers in the industry expect you to bring your own personal equipment and we often prefer to use our own personal equipment. We’ll discuss this more later, but for now just consider the group equipment like canoes, or all the equipment for archery, or ropes for abseiling.)

• hours of work (do you get to choose when you do the work?)

Some examples.

Here are some common employment scenarios to consider in light of the remaining considerations:

Guiding on a single day of abseiling for an adventure company

1. Your employer tells you what abseil site to go to

2. Your employer loses out if the clients don’t pay or if they didn’t quote enough (not you)

3. Your employer provides all of the gear for the day. You may choose to use your own helmet/ harness, but you aren’t expected to provide ropes, helmets and harnesses for the clients.

4. Your employer tells you what time to start and how long the day will go for.

In this instance you would be an employee.

Guiding on a multiday walk with adult clients for a hiking company

1. Your employer might provide you with the freedom to choose the route, and pick campsites, etc, but you can’t choose to go climbing instead of hiking.

2. Your employer is the one who loses out if the clients demand a refund when they pull out partway through the hike (even if that was your fault).

3. You are not expected to provide all of the tents and sleeping bags etc for the clients. But you may choose to use your own gear for comfort reasons.

4. You can’t decide that the 10 day hike that you’ve been booked in for can be done in 8 days. And you can’t decide to change start date of the hike to fit in with other jobs you have.

In this instance you would be an employee.

Working for a school (directly) on a single day point to point kayaking program

1. The school tells you what you are going to do for the day.

2. You get paid an hourly amount even if you work overtime to get the group to the destination. (As opposed to a contractor who would quote for “getting the job done” and who couldn’t pass on the overtime costs to the client unless it was written in the contract.)

3. The school will worry about the provision of the kayaking equipment. Even if they all got destroyed in a freak kayak trailer accident on the day, you would not be financially responsible for that equipment.

4. You get paid an hourly rate, not a rate for “getting the group to the other end”. Your start time is fixed, and if you finish early then your employer can send you home early and you’ll only get paid up until the time you went home.

In this instance you would be an employee.

Providing a photograph of a mountain bike in action for an adventure magazine

1. You are commissioned to provide a piece of work. You choose what kind of camera you will use, what time of day you will take the photo, and how many hours you will take to research the shot, etc. You have complete control over how the work is performed, all you have to do is meet the specifications outlined by the client.

2. If you quote $350 for a photo, but have to pay a model to be in the shot (eg. $250), and need a film permit to shoot at the location you want ($150), then you are losing $50 on the gig, not the client. On the other hand, if you quote $600, then you profit.

3. The client might provide a bike to use in the shoot, but you provide your own camera etc.

4. You get to choose where and when you take the shot. If you can get the photo done in 5 minutes then you benefit and the client can’t charge you less.

In this instance you would be a contractor.

Obviously there are some times where the line between being a contractor and being an employee is very grey and these simple worked examples above won’t be a huge help, so here’s a few more considerations:

Why would a boss want to employ you as a contractor instead of as an employee?

• It reduces their risk and costs if you get injured

• It reduces their risk if someone in your group gets injured or something goes wrong (which probably wouldn't hold up in court but it would make it easier for them to be at arms length)

• It reduces their costs (they don't have to pay you Super, or pay workers comp, etc)

• It reduces their administration (because all they have to do is pay an invoice and avoid all the above stuff)

Summary 

I will summarise with the following:

• As a guide, the vast majority of work in the outdoor recreation industry is legally required to be as an employee.

Additionally, being a contractor is expensive and has increased risk and effort involved. It is also often illegal and exploitative.

Endnote

At the end of this, if you still think you are in the grey and can't decide if you are (or want to be) a contractor vs an employee, then here is what I would recommend:

• make a decision as to whether you are willing to bear the risks

• make a decision as to whether you are willing to bear the costs

• figure out if they are paying you enough to compensate for all your risk and the extra costs you will incur.

If you decide to be a contractor, I would suggest that you want to be paid at LEAST 33% (and more likely 50%) above your normal pay rates to allow for superannuation, workers compensation, insurances, permits, administration of all that stuff, and the additional risk you are taking on board.

And whatever you do: write your agreement down and get them to sign it.