From the meteoric rise of the gig economy to the emergence of COVID-19, workforce supply and demand dynamics have been disrupted along with the traditional ways of working.

Clear shifts are redefining today’s working environment, whether it’s the widely publicised skills shortage, the pivot to digital-first remote working, or the exploration of a four-day work week.

In the last few weeks alone, we have seen some of the most significant proposed changes to Australia’s industrial relations laws in decades. For example, the Federal Government has announced its intention to overhaul enterprise bargaining laws, potentially paving the way for unions and employers to negotiate collective wage bargaining across multiple employers within an industry.

What’s more, the government is also set to make amendments to the Fair Work Act to increase protections around flexible working while making unpaid parental leave more accessible.

New dynamics, new opportunities

Workplace disruption is causing significant anxiety for employers contending with a shifting regulatory landscape and heightened competition for talent. It’s a different story for workers seeking new opportunities. In fact, with wages expected to rise by 2.75% in 2022 and 3% in 2023, looking further afield could become more attractive.

For those seriously contemplating a move, it’s important to consider the pros and cons of pursuing work as an employee or a contractor. For example, if you’re looking for a role that provides you with a high degree of flexibility and autonomy, then switching to contracting might be for you. Conversely, if you’re looking for something more secure with guaranteed hours and income, it could be best to stick with being an employee.

Employee vs contractor

Put simply, an employee is someone who works under the direction of an employer within a commercial enterprise while a contractor works for themselves and provides a service. The terms of an employment contract are set by a contract of service, while a contractor’s terms are set by a contract for service; the differences are subtle but important.

	Employment	Contractor
Pros	Greater stability and peace of mind A clear and structured routine Guaranteed a salary, superannuation payments, sick leave, annual leave, and potentially various other entitlements Fixed hours of work, a set place of work and a set number of days off Less administration and tax reporting requirements	Greater flexibility and freedom The ability to set your own hours, where you work, and who you work with The choice to subcontract work out to other people The ability to work with multiple organisations concurrently. Tax benefits
Cons	Less flexibility in terms of working hours and location Less tax-deductible expenses Fixed annual leave	Less job security Increased administration requirements Less career development within an organisation

Making the right choice

Choosing whether to pursue opportunities as an employee or contractor all comes down to personal circumstances. If you’re considering making a switch, then it’s important to consider the various implications, some of which have been laid out in this article.

Please get in touch today if you require guidance on making the right choice.

Employee vs contractor – what’s the right option?

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