Is Your Subbie a Contractor
or an Employee?

What Is ContractorCheck

A scored risk assessor — not a yes/no answer

The ATO's official Employee/Contractor Decision Tool gives you a binary yes/no with no explanation of which factors drove the result and no guidance on what to do about it. ContractorCheck does something different: it runs the same multi-factor test but returns a weighted risk score — Low, Medium, or High — with each risk factor flagged individually, explained in plain English, with the specific legal basis noted.

For construction businesses using trade subbies, this matters. You might have five subcontractors with similar arrangements but different risk profiles — depending on whether they work for other builders, how they're paid, and what your written contracts say. ContractorCheck lets you assess each arrangement in about two minutes.

One assessment per worker. Run it for each contractor or subbie whose status you want to review. The result is shareable — send the link to your accountant, lawyer, or bookkeeper so they can see exactly which factors drove the risk score.

What changed in 2022 — and why it matters for your subbies

In February 2022, the High Court of Australia handed down two landmark decisions that changed how worker status is determined:

ZG Operations v Jamsek [2022] HCA 2 and CFMMEU v Personnel Contracting [2022] HCA 1 established that the written contract between the parties is now the primary lens for determining whether a worker is an employee or an independent contractor — provided the contract is not itself a sham.

Before 2022, courts regularly looked beyond the contract to the practical reality of the relationship. Now, a clearly worded written contract specifying an independent contractor arrangement provides significantly stronger protection than it did before — but only if the contract actually reflects the arrangement and has been reviewed since the rulings.

The practical consequence for construction businesses: if your subcontractor arrangements are based on old agreements, verbal arrangements, or templates that pre-date the 2022 rulings, your protection is weaker than you might think. The ATO still applies its multi-factor test to assess whether the economic reality of the arrangement is consistent with genuine contracting — even where a written contract exists.

ContractorCheck is built around the post-2022 legal framework, weighting the written contract factors accordingly.

Construction and subbies — the highest-risk industry

Construction is explicitly the highest-risk industry for sham contracting in Australia. The ATO and Fair Work Ombudsman run regular enforcement campaigns targeting construction businesses, with particular focus on:

Long-term subcontractors — subbies who have worked exclusively (or almost exclusively) for one builder for years without reviewing the written arrangements. The longer the relationship, the more it can start to resemble employment.

Labour-only arrangements — where the subbie provides only their labour (not their own tools, materials, or a fixed-price result), which reads as employment regardless of what the contract says.

Hourly-rate payment — paying a subbie by the hour (rather than by result, per m², or per trade package) is one of the clearest employment indicators in construction.

Directed work — site supervisors who tell subbies exactly how, when, and in what order to do tasks are exercising a degree of control that looks like the employer/employee relationship.

Penalties for sham contracting under the Fair Work Act can reach $469,500 per contravention. Superannuation liability (including unpaid super going back years), annual leave, and sick leave entitlements may also be recoverable. Voluntary disclosure to the ATO before an audit begins can significantly reduce penalties.

Run the assessment for your contractor arrangements →