As a new business owner that requires staff to help run their enterprise, you might be wondering what the options are when it comes to hiring staff. Read below for a rundown of the 5 most common types of employees in order to decide what will best suit your circumstances.
Permanent or fixed term
When many people think of being an employee, this is the type of arrangement most are familiar with. Ongoing employees receive wages in the form of a salary and as their employer you will withhold money from their pay packet for tax obligations. These days it’s perfectly common to be a permanent employee that works from home or is on the road, but traditionally the majority of these employees were physically present at the business premises.
Casual staff generally work irregular hours at short notice or regularly as per your agreement with them. Although you still pay them wages and withhold tax, they won’t have the leave entitlements of a permanent employee. Casual employees may be terminated without notice, but you will need to be aware of the award or contract they are employed under in case there is a clause that covers this situation. Casuals are often seen as a good way to hire short term staff, but sometimes exceptional staff will be taken on permanently if all parties agree.
May be independent and perform work for more than one business/customer or client. Typically a contractor provides their own equipment to perform a designated task. Many contractors will subcontract their work and will invoice you as the business owner for any work they are responsible for completing for you. Contractors will have their own ABN as they are running their own business, even if they are a sole contractor (meaning they are a business of one).
Agency staff/labour hire
If you use an agency to hire staff you’ll typically specify in advance a set period or number of hours, and the agency will charge you a commission for ‘finding’ them. Often useful for short term or short notice situations, agency staff are paid by the agency, which you will forward their wages to.
Apprenticeships are specific contracts that you sign with an employee on the basis that you will train them in the role you wish them to perform which leads to a nationally recognised qualification upon completion. If you employee people in this way, there may be some government wage subsidies you can access.
Buying a business
If you have, however, been looking at purchasing pre-existing businesses for sale, chances are there will already be staff working there. If current employees will be transferred with the business, be sure to receive the details of employee records from the previous owner and discuss the contractual obligations that will apply.
You should also confirm that outstanding wages and accrued leave has been paid out by the previous owner if required by law, depending on their award and state where your business is located.
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