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BRIEF, AUSTRALIA
Australian Tax Office crackdown targets workers

Margarita Windisch

4 April 2009

It has become common practice for many bosses to tell potential employees they must have an Australian Business Number (ABN) to secure a job.

In these cases the employee is treated as an “independent contractor” or “sole trader”. This allows the employer to avoid payment of workers compensation, sick pay, annual leave, and other entitlements.

The Australian Taxation Office, which issues ABNs, has not really challenged this situation for many years. Since March however, it has begun to take action. Instead of targeting the employers who falsely put on workers as contractors to evade paying proper entitlements, it is targeting the workers themselves.

Those applying for an ABN now have to answer a questionnaire to prove they are a genuine independent contractor.

Workers without a current ABN, including many of those sacked as a result of the current recession, will be at a disadvantage.

The ATO could easily crack down on bosses who evade their responsibilities by forcing employees onto ABNs, rather than targeting unemployed workers.