The ATO and Fair Work Ombudsman have announced a joint crackdown on sham contracting, with investigations already underway in the construction and road transport sectors.

What is Sham Contracting?

Sham contracting occurs when a worker is labelled as an independent contractor when they are genuinely an employee – often to avoid paying super, leave and workers compensation entitlements.

Key Points

Here is what businesses need to know:

• It’s not enough to simply call someone a contractor. The substance of the arrangement matters.
• Penalties for sham contracting under the Fair Work Act can reach $495,000 (or three times the underpayment amount for larger businesses).
• Additional ATO charges may apply – including PAYG withholding penalties and the superannuation guarantee charge.
• Data matching through taxable payments annual reporting (TPAR) gives the ATO visibility over $507 billion in contractor payments annually.
• Nearly 1000 community tip offs are received every week.

A copy of the joint statement by the Fair Work Ombudsman and the ATO last Friday can be found here Sham contracting in the spotlight – Fair Work Ombudsman.

If you have any questions about sham contracting or need your contractual arrangements reviewed, please contact the O’Sullivan Sneddon Law employment law team.

Employment

We hear this explanation often.

A complaint is made about comments, jokes, messages or conduct in the workplace, and the response is: “It was only friendly banter.”

Similarly, an employer or manager might assume that a conversation behind closed doors was private and therefore could not amount to harassment.

That is not how the law approaches it.

In Queensland, sexual harassment in the workplace is not limited to physical conduct or overt propositions. It can include unwelcome comments, jokes, questions, gestures, messages or behaviour of a sexual nature where a reasonable person would have anticipated the possibility that the other person would be offended, humiliated or intimidated.

The fact that something was intended as a joke, said privately, or accepted as “workplace culture” does not necessarily make it acceptable — or lawful.

For employers, the key issue is not whether the person responsible thought it was harmless. The question is whether the conduct was unwelcome and whether its impact, viewed objectively, crossed the line.

Workplaces should be clear about expectations, respond promptly to complaints, and avoid dismissing conduct as “banter” without properly considering the legal and practical risks.

Sexual harassment laws are not about stopping ordinary workplace conversation. They are about ensuring people can work in an environment that is safe, respectful and free from unlawful conduct.

General information only — not legal advice.

Sexual Harassment Disputes

The Fair Work Commission has announced significant wage changes which take effect from 1 July 2026. These changes impact both the national minimum wage and modern award wages and every employer needs to be prepared.

From 1 July:

• The national minimum wage will increase to $1,004.90 per week or $26.44 per hour
• The minimum award wage will increase by 4.75%.

These adjustments are designed to support cost of living pressures, but they also create compliance obligations for employers.

What does your business need to do?

If you employ staff who are covered by a modern award, you will need to ensure that every employee is paid at least the new legal minimum. This includes paying:

✔️ Minimum hourly rates

✔️ Applicable allowances

✔️ Overtime rates

✔️ Penalty rates

Failing to meet these requirements can result in underpayments, breaches of the Fair Work Act and potential regulatory action. Now is the time to review your payroll and rostering practices and your employment contracts to ensure full compliance.

Where can you find the updated minimum rates?

The minimum rates of pay can be calculated using the Fair Work Ombudsman’s Pay and Conditions Tool here: https://calculate.fairwork.gov.au/

Employment