Sham Contracting Penalties
Definition
Misclassifying trainers as independent contractors when they function as employees triggers severe penalties including fines up to AUD 82,500 for companies, superannuation make-up payments with interest, and full tax withholding amounts.[3]
Key Findings
- Financial Impact: AUD 82,500 company fine per violation; superannuation charge x2; back-payments + interest.[3][6]
- Frequency: Per misclassified contractor or audit finding
- Root Cause: Incorrect worker classification in trainer payment process without legal verification
Why This Matters
The Pitch: Professional Training firms in Australia waste AUD 82,500+ per incident on sham contracting fines. Automation of contractor classification and payment compliance eliminates this risk.
Affected Stakeholders
Business owners, HR managers, Finance teams
Deep Analysis (Premium)
Financial Impact
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Current Workarounds
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Superannuation Guarantee Shortfalls
ABN Verification & Audit Failures
ESOS Credential Delays Churn
ASQA Compliance Penalties
Manual Credential Issuance Bottlenecks
Manual CPD Tracking Time Loss
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