There has been a significant amount of questions and enquiries raised as a result of three blog posts recently posted by Pharmacy SOS. Two in relation to how a locum pharmacist should be paid by the pharmacy here and here, and the third one about new locuming laws that come in to play on 30th October (2019) in Victoria here.
While links were provided to the source of the information, it appears there are still some unanswered questions and myths that need to be addressed. So here is an attempt to answer some of these questions.
Before we start, it should be noted that there are two distinct issues that were blogged about and that should not be confused:
A. Locuming laws that will come in to effect (these are labour hire laws, october 30, Victoria). They apply to locum pharmacist hiring also. And….
B. As a locum pharmacist, how to be paid: as an “employee” or “contractor”. And sometimes, even if you believe you are a contractor, the business needs to pay you as though you are an employee! This was discussed at length in the blogs and so need to go through it again.
The important thing is, they are different issues and independent of each other, yet inter-related on completion of a locum shift and paying the pharmacist.
So here are some of the questions we have been asked:
About the issue of the ABN:
1. I am a locum and have an ABN on my invoice so I must be a contractor, right?
Not necessarily. Just because you have an ABN on your invoice, does not automatically make you a contractor.
2. If it is a short shift, it must be a contract job, right?
Not necessarily. Just becuase a shift is for one day or a few hours, does not mean that the locum is a contractor, even if there is an agreement as such.
3. I have been using invoices for locum shifts for years, and everybody else does it, what has changed?
Just because you have been doing this for years, or just because everybody else is doing it in the industry, does not make the case that you should be paid as a contractor.
4. What is the difference between a contractor and employee?
This question has been answered by the ATO and the Fairwork Ombudsman at length and you can view their answers on the links below. Generally speaking, a contractor has full control over their working conditions. An employee however, has less control over that. The more responsibilities and conditions that are set upon the locum, the more likely they are considered to be an employee.
5. How can I determine if I am a contractor or employee?
Use the ATO tool to be able to get some guidance on this issue here. The video in the link mentions some of the myths so is worth a watch.
You should then save a copy of the results you get and keep that as “a record of your genuine attempt to understand your obligations”.
Show your accountant the results and seek professional advice if further information is needed.
Remember that “independent contractors can be treated as employees under certain legislation, such as tax or super.”
6. My accountant is saying something else to what is being said here?
Go back to question 5, use the ATO tool, save a copy, and show your accountant. You can then discuss it with your accountant.
7. Where else can I find more information?
Please see the links at the end of this blog.
About the issue of the new Labour Hire Laws in Victoria:
8. My mate occasionally helps me with some locum shifts at the pharmacy – do the new labour hire laws change anything?
You can directly engage your friend or colleague to do shifts for you as per usual. A labour hire agency is not being used in this engagement. However, we always recommend seeking professional advice.
9. Does the new labour hire laws mean that I must go through an agency every time I need a locum or accept a locum pharmacist job?
No. They do not. The new laws only applies to a “Labour Hire” arrangement. However, you should see the LHLO website for more information, what the definitions are, and to understand your obligations, and as always recommend seeking professional advice.
10. The new labour hire laws only apply to the farming industry to protect the workers. Do they really apply to professionals such as nurses, doctors and pharmacists?
Yes they do. The new labour hire laws apply across the labour hire industry in Victoria.
General:
11. I don’t like these rules you just set!?!
That’s OK, we are not here to make you like the rules, nor did we make them up, so don’t shoot the messenger. We are just pointing out the information provided by the official websites objectively.
12. Are you providing advice?
No. The information here does NOT constitute advice. You need to seek professional advice about your own situation and business. The information provided has relied on our own sourced professional advice from accountants, the ATO, and the official links below.
Resources:
ATO tool employer or contractor: https://www.ato.gov.au/Calculators-and-tools/Employee-or-contractor/
Business.gov.au employer or contractor: https://www.business.gov.au/people/contractors/employee-or-contractor
Fairwork – Independent contractors and employees: https://www.fairwork.gov.au/how-we-will-help/templates-and-guides/fact-sheets/rights-and-obligations/independent-contractors-and-employees
The Labour Hire Authority in Victoria (LHLO): https://labourhireauthority.vic.gov.au/
(Last Updated on April 8, 2023)