Australia’s employment laws are killing small business productivity

Leaving aside the 121 Modern Awards, one issue keeps coming up with business owners:

👉 Who is actually an employee, and who is an independent contractor?

Despite the 2024 Fair Work changes, the answer is still: it depends.

Because worker classification isn’t governed by one law.
It’s governed by at least four:

• Fair Work Act
• Superannuation law
• Payroll tax (state-based, up to 8 versions)
• Workers compensation (also state-based)

That means the same worker can be:

• An independent contractor under the Fair Work Act
• An employee under superannuation law, triggering a super obligation
• An employee for payroll tax purposes, meaning no super, but payroll tax applies
• And then there’s workers compensation… which may or may not apply again

One worker. Four definitions.

For small business, this isn’t just annoying, it’s a productivity drain:

• Time and money spent on advice, not growth
• Higher compliance risk
• Less confidence to hire locally

So, businesses adapt.

More work gets pushed offshore.
Not because the talent isn’t here — but because the system is too hard to navigate.

Complexity doesn’t create fairness.
It creates hesitation.
And hesitation is killing small business productivity.

Contact Wayne on wayne@arealcfo.com.au or 0412 227 052.

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Want a confidential discussion on your business situation, help with your grant application or to learn more about my Outsourced CFO Services, simply email me at wayne@aRealCFO.com.au or call me on 0412 227 052