How to engage people in Australia
When engaging individuals to work in Australia, there are a number of different engagement models available for businesses to consider to best suit their needs.
Typically, most employers tend to engage employees on a full-time basis directly through an Australian operating entity.
Foreign entities who are not yet established or do not operate in Australia can also engage employees. Alternatively, they may choose to engage individuals through a third-party employer of record. An employer of record is the legal employer of an employee who takes on legal responsibility for the employees for matters including but not limited to issuing contracts, payroll, leave accruals, benefits and taxes.
Finally, both domestic and foreign entities can engage individuals through a third-party contracting business.
Below is a high-level summary of the most common types of engagements:
| Type of engagement | Definition | Key matters to note |
| Full-time | An employee typically engaged to work 38 ordinary hours per week, on an ongoing basis and who receives benefits like paid leave and notice of termination. |
Employees who are engaged on a full-time basis are typically paid an annual salary. It is important to ensure that the contract of employment provides for a minimum salary that is above Modern Award entitlements including and absorbing any penalty rates or entitlements that would otherwise be applicable in accordance with a Modern Award, by way of a set off clause. |
| Part-time | An employee who works regular hours less than 38 hours per week |
Part-time employees work less than 38 hours per week and may have a set schedule in relation to the days and hours they work. |
| Casual | An employee who accepts an offer for a job from an employer knowing that there is no firm advance commitment to ongoing work with an agreed pattern of work. |
Casual employees are typically entitled to a 25% loading on their hourly rate of pay. |
| Fixed-term | An employee who is engaged under a contract of employment that is made for a specific period of time. |
From 6 December 2023, there are certain prohibitions on the continued, or long-term use of fixed-term contracts |
| Shiftworker | An employee who works fixed hours of work (e.g. shifts or rosters) that are outside or partly outside of normal working hours. Modern awards and registered agreements often provide a specific definition of shiftworker. |
Under the National Employment Standards, shiftworkers are entitled to an additional week of annual leave each calendar year. Under an applicable Fair Work modern award, shiftworkers may be entitled to a shift loading. |
| Contractor/Consultant | A person who provides services to the business on negotiated terms including as to fees, project work and outcomes to be achieved. A contractor may be able to work for more than one business at a time. |
Commonly engaged as a sole trader (ABN) – an individual who runs his or her own business as an individual rather than through a partnership or company, or through an entity (ACN). Sole traders are still entitled to have a business make superannuation contributions on their behalf and will be covered by the business’ workers’ compensation insurance. |
| Intern | Individuals who participate in work experience as part of on-the-job training. |
Individuals doing this kind of training do not need to be paid if they are a student or on vocational placement, and provided they are not performing work that would otherwise be paid work performed by an employee. |
It is important that businesses ensure all employees, contractors and interns are issued with compliant contracts to accurately reflect the nature of their engagement and to avoid any dispute in relation to employment related entitlements.
