The Labour Hire Licensing Authority has on the 24th of February 2022 sent out a newsletter with the heading “Labour Hire Authority News – Sham contractors put on notice in 2022”, a reminder that sham contracting is still a significant issue in the industry and the locum pharmacy industry is no exception to this.
While the newsletter is specifically targeting labour hire agencies, it is no different when it comes to pharmacies who pay locums on invoice “because the locum has an ABN.” Having an ABN on its own is not a good enough reason to justify paying the locum on invoice. In fact, doing so may mean increased costs and burden to the business such as additional superannuation and insurance premiums that were initially not considered when first hiring the locum. You see, it may well be that at some time in the future, a claim against the pharmacy can be made, or an audit conducted, and superannuation costs will need to be paif on top of the invoice (even if it was invoiced already) as well as other premiums such as work cover and payroll taxes. This can be significant if accumulated over time.
So how can one determine if the locum pharmacist can be considered as contractor so you can pay them on invoice?
Here are some questions you can ask yourself before accepting a locum pharmacist that invoices:
- Does the locum pharmacist decide what hours they can come in to the pharmacy to open and close the shop?
- Does the locum pharmacist decide which dispensing system to use?
- Does the locum pharmacist decide how the workflow of the pharmacy should run?
- Does the locum pharmacist decide who does the job, eg, subcontract to another person or delegate their tasks?
- Does the locum pharmacist decide how much they get paid based on a quote they provide?
- Does the locum pharmacist operate as a business independent of the pharmacy?
The answers to all of the above questions are generally “No”, yet, some locums continue to insist on being paid on invoice. Pharmacy SOS has made it clear previously that we do not accept invoices from locums for this reason, and that we strongly recommend pharmacies do not accept locum pharmacists who insist on invoicing, unless they have strong advice in writing to the contrary that a particular scenario is not going to fall under the category of sham contracting.
You can read some useful blogs we have written by clicking on the links below:
- Unmasking the truth: detailed information with more links.
- Pharmacy SOS is a licensed provider.
- Laws changed in 2019.
- Labour Hire Authority to tackle sham contracting newsletter 24/2/2022, with useful links.
Pharmacy SOS is a licensed Labour Hire Agency (LHA Victoria) and can help with your payroll and locuming needs. Give us a call on 1300 505 247.
(Last Updated on September 1, 2022)