Employee or contractor

SMB HR Basics (Part 1) – People and Policies

Growing your team can be daunting.  What do I really need to know? Where do I start?

Seed People Consulting is proud to present a Four Part series of SMB HR Basics to help you set up your business with the core HR requirements (as well as a couple of bonus points!) to ensure you’re compliant, organised and ready to hire, motivate and manage a capable and supported team.

In this Part 1 of 4, we will cover the following topics:

  • What type of employee or contractor do I need?
  • What are the HR frameworks and policies that are necessary right from the outset?
  • What organisations and support networks are available to answer my questions?

Navigating types of employment

Most people are aware that there are a number of different ways in which you can hire a new employee. The main differences between casual, Part Time and Full Time employment are listed here, as well as a basic guide for the difference between Employees and Contractors (It’s important to note that this is a general guide – some Industrial Awards may have slightly different requirements.  It’s important to check your relevant Award, or speak to a specialist, to ensure you have your bases covered)

Casual Employees: Casual employment is flexible, paid by the hour and has no guarantee of ongoing employment. The benefit of casual employees is that they are paid for exactly the hours you roster them to work and if you experience a downturn or increase in customers, you can adjust their hours to suit. In saying that, casual employees are also entitled to that same flexibility and may not always be available when you need them.

Part Time Employees: An employee who works Part Time is permanently employed by your business to work an agreed number of hours per week (or fortnight) on a regular, set roster. If the amount of work that you wish to roster someone is reasonably predictable, you may consider hiring them as Part Time as the rate of pay is generally lower than that of a casual employee. Keep in mind however, as a permanent member of your team, Part Time employees accrue leave entitlements and a number of other benefits.

Full Time Employees: Full time employees work an average of 38 hours per week on a permanent basis. They may be paid at an hourly, weekly or a yearly salaried rate. They are entitled to leave accruals and other permanent employment benefits

Contractors: Contractors are engaged on an hourly basis and are not employed by your business. They are paid for a result achieved based on a quote they provide prior to commencing the work itself. They are accountable for their own insurance, superannuation and tax payments.  To ensure you avoid ‘sham’ contracts (big in the news at the moment, in the gig economy!) consider how much direction you provide a contractor, enable them to bring their own ‘equipment’ rather than supply it, and enable them to work for other organisations (which would not be a conflict of interest in the work they do for you).

In establishing what type of employee or contractor you may need to support your business, start by working on a base roster or minimum hours, followed by assessing the permanency or flexibility required in the role.


HR Frameworks and Policies

Whilst some may prefer to leave the HR policies to the side due to their reputation as being fairly unexciting, there are a few things that will keep you safe in terms of compliance and obligations to your team members that are really worth the effort…

  • CONTRACTS – Whether you decide to hire casual, part time or full time employees, an employment contract will need to be issued. These need to include the minimum requirements under the National Employment Standards (including issuing Fair Work Statements to all new employees) and be fair and reasonable in every sense. This should also include a clear statement confirming the relevant Award coverage for the employee (if applicable).
  • CODE OF CONDUCT – This sets the minimum standards for employee behaviour and will help you to manage expectations on conduct and performance of your team members.
  • WORKPLACE HEALTH & SAFETY POLICY – The health and safety of your employees should always be a priority. The provision of a WHS Policy shows your commitment to a safe working environment.
  • CONFIDENTIALITY AGREEMENT – Your business, client and product information is important, don’t let it go wandering. Ensure you have any employees and contractors working with you sign an agreement binding them to confidentiality regarding your important data, including clear definitions on what you consider to be ‘confidential information’.


Where else can I go for help?

Seed People Consulting offers the Seed HR Hub; a self-service online portal, available 24/7, including a number of templates, policies and guidelines that can be amended and branded to suit your business. Visit our website to find out more https://seedpeopleconsulting.com.au/small-to-medium-business-hr-support/

There are also a number of supportive Government and non-government organisations that can provide you with more information on the above. Start with some of these:


What’s coming up next?

In the next issue of our SMB HR Basics – Four Part Series, we will focus on ‘Pay & Compliance’, covering all your SMB essentials on:

  • Payslips
  • Record keeping requirements
  • Superannuation
  • Compliance with Awards

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