We know that many game workers in Australia are being sham contracted. This guide will help you understand whether or not sham contracting is happening to you, and what you can do about it.

What is sham contracting?

“Employees” and “contractors” are two very different things. An employee works for someone else, but a contractor works for themselves.

Sham contracting is when it says that you are a contractor on paper, but in practice you are treated as if you were an employee.

This arrangement means that you are missing out on all of the benefits that are supposed to come with being an employee – such as annual leave, sick leave, superannuation, and so on. That’s why it’s called a “sham” contract.

Sham contracting is illegal, and it’s very commonly used in Australia as a tool to drive down wages and conditions for everyone in your industry.

Why would someone sham contract me?

Sham contracting saves your employer money because it means they don’t have to pay for your benefits, or the relevant employee taxes.

It also means they are reducing their liability costs because you are not technically their employee and they are not legally responsible for you.

Some employers are unaware that they are sham contracting their workers and do not know the difference. Unfortunately, many employers are fully aware of what they are doing.

How do I know if I am being sham contracted?

A genuine contractor is expected to be quite independent. They should provide their own equipment, set their own rates, and decide when, where and how they will perform the required task.

By contrast, an employee is expected to be subservient. They can be told when, where and how to work, are given equipment to do the job (such as computers and uniforms), and do not set their own rates. In exchange for this, they receive entitlements.

Sham contracting is often a bit of a grey area and is rarely legally clear cut. Most formal tests will come down to deciding which side of the employee/contractor split is more appropriate.

There are several tools online which might assist:

These tools are guides only and do not take into account all of your personal circumstances. If you are concerned, contact us immediately.

What can I do about it?

You can make an underpayment claim for all of the entitlements you should have accumulated during the time you were being sham contracted.

Making these claims can be costly, time consuming, and confusing. If you are a paying member of Professionals Australia, they can advise you on your specific situation and lodge the claim for you.