Table of contents

Part 4 of the Startup Playbook Series.

In part 4 of the Startup Playbook Series, we look at how to bring on extra hands when you can’t do all the work yourself.

I need help!

As with any venture, you are going to need some help along the way. To grow and scale, you are going to need to trust others to share the load with you – whether this is just an extra set of hands or a technical expert. Employees and contractors will be key to getting things done.  

Employees v Contractors

The law treats employees and contractors differently. Whilst the obligations and expectations may differ subtly, it is important to ensure you engage employees and contractors on the basis you require. Doing so will help protect your company against potential future costly claims in respect of owed superannuation and other entitlements.

For most startups, offering employment is not a viable option, and contractors are often used. However, there is a risk that a contractor may be found to be an employee. The general rule is: if it acts like a duck, and quacks like a duck, Fair Work Australia may think it’s a duck. We’d love to unpack this concept in more detail with you — stay tuned for a deeper dive on the key considerations for hiring contractors. In the meantime, let’s look at the most important point: setting clear expectations.

Setting clear expectations

One of the best ways to help protect your company against such claims is by having a clear set of expectations and principles from the outset – in either:

  • an employment agreement for employees; or
  • an independent contractor agreement for contractors.

In addition to potential claims, employment agreements and independent contractor agreements can provide your company with further protections in respect of:

  • non-compete and non-solicitation obligations;
  • confidentiality obligations; or
  • intellectual property protection.

Things to consider

  • Do you have ongoing work within your company, or is it a particular project?
  • Who will own the things that your employees and contractors create?  
  • What have you engaged your employees and contractors to do?
  • What are the timeframes for the work?
  • Are you paying your employees and contractors enough?
  • Are you wanting to provide paid leave and superannuation?
  • Are you paying a salary or paying invoices, subject to GST?
  • Are you providing anything to do the work (a uniform, a laptop, other equipment)?
  • If your employees and contractors are allowed to work for other people, can they work for a competitor?
  • What confidential information do your employees, contractors, advisers and other service providers have access to?

Read on to Part 5: Clients & Customers.

Get in touch with the Burch&Co Startup & Capital team to discuss how we can help your startup with its employment needs.

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