In a recent newsletter the Labour Hire Licensing Authority (LHA) highlighted its continued focus on addressing sham contracting practices across industries—which includes paying a locum invoice directly in the community pharmacy pharmacy scenario.
While their message was directed primarily at labour hire providers, the implications apply equally to pharmacies that pay locum pharmacists directly on invoice simply because they have an ABN. It’s a common misconception that holding an ABN automatically qualifies someone as an independent contractor. In reality, this assumption can expose pharmacies to serious financial and legal risks.
Why Paying Locums on Invoice May Be Risky
When a locum pharmacist is paid on invoice without using a licensed labour hire agency, the pharmacy may unknowingly take on employer responsibilities, including:
Superannuation contributions (even retroactively),
WorkCover insurance,
Payroll tax obligations,
And potential penalties during audits or disputes.
These costs, especially if accumulated over time, can significantly burden a business.
Are They Really a Contractor? Key Questions to Ask
Before agreeing to pay a locum pharmacist on invoice, consider the following:
Does the locum determine the pharmacy’s operating hours or the hours they will work?
Do they choose the dispensing software or workflow?
Can they delegate or subcontract their responsibilities?
Do they set their own rates as an independent business?
Are they operating as a business truly separate from your pharmacy?
If your answer is “No” to most or all of these questions, then it’s unlikely the locum meets the criteria of a contractor under ATO guidelines—making invoice payments inappropriate and risky.
Pharmacy SOS: Your Trusted Labour Hire Partner
At Pharmacy SOS, we are a fully licensed Labour Hire Agency in both Victoria and Queensland, and operate Australia-wide. We ensure that all placements are fully compliant with current labour laws and take the hassle out of payroll for pharmacies.
We do not accept locum invoices for this reason and strongly advise pharmacies to avoid them unless they’ve received formal legal advice confirming compliance in that specific scenario.
Need Support?
We offer a complete labour hire and payroll service, even if you’ve sourced your own locum. No finder’s fees—just a simple, compliant solution that protects your business and saves you time.
📞 Call us today on 1300 505 247 to learn more or visit pharmacysos.com.au.
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