Australia has the economic and regulatory factors that make it a great site for international hiring and expansion. With a Gross Domestic Product of approximately $1.3 billion, Australia is the 13th-largest economy in the world. This developed country is one of few to experience consistent economic growth over the past 26 years. As of 2017, Australia’s economy has racked up the longest stretch of growth in modern history. All of these factors make Australia a top destination for global companies.
Hiring skilled workers in Australia can help develop and grow your business. However, there are also international labor laws that you must navigate as you do so. Here’s a brief introduction to your options for Australia hiring.
Australia Hiring: Business Entity Needed
Like in any nation, you can set up a legal business entity to hire in Australia. The most common forms of legal entities are branch offices and subsidiaries. The main difference between the two is the amount of legal separation between the entity and the parent company.
A subsidiary is a separate entity; however, a branch is not. Both have advantages and disadvantages, but they do have one thing in common: it takes time and money to create both. Creating a subsidiary has several other requirements outside of the initial expense. You need to provide regulators with:
- A director who sits on the board and resides in Australia
- A registered Australian address
- A public officer, who resides in Australia, as the representative to the Australian Taxation Office
Attempting to hire workers without a legal entity can result in legal problems. Plan ahead to establish a branch or subsidiary before you hire your first worker or make your first sale.
If you’re unsure about which direction you should take for international operations and Australia employment, you can use a more flexible hiring solution like International PEO. This is an employer of record approach and allows you to remain compliant during the beginning stages of market entry.
Worker Classifications in Australia
The two most important employment classifications are standard: employees and independent contractors. While labor laws can vary drastically from country to country, the definitions of employee and contractor status remain approximately the same. In Australia, specifically, an independent contractor status depends on having these factors:
- An enterprise of their own
- Documents describing the work as an independent contractor
- Relatively free from supervision by the client
- Provides their own materials, equipment, and work space
Contractors may seem like a great option for expanding companies, because they don’t receive the same protections as regular employees. But there are legal and financial risks when you misclassify workers. Australia has specific laws against sham contracts, and breaking them can result in penalties.
Contracts for Hiring in Australia
Australian employment law does not require a contract to start employment. However, it is best practice to write out an employment contract before hiring someone. Clear documentation can help both the employer and the worker understand their relationship and mitigate any potential legal risk. Recent case law suggests including your policies, codes of conduct, and other related documents in the employment contract.
While written contracts aren’t mandatory, many contractual terms are implied in an employment agreement:
- The employer must provide a safe working environment
- The employee should act with fidelity and good faith
- The employee should act with trust and confidence
Australia implements hiring incentive programs to encourage employing specific groups of people. These programs can make hiring a new worker less expensive, as the government supplements a portion of the worker’s compensation. Here are three of the most important programs:
- Restart Wage Subsidy, which was designed to encourage hiring individuals over 50 who have been on income support for six months or more
- Disability assistance to help employers modify their space or incentives to hire people with disabilities
- Support to hire indigenous workers
Benefit from Flexible Hiring Methods
Expanding your business in Australia can be a rewarding endeavor. The hiring methods mentioned above require investing a significant amount of time and money upfront to properly set up your employees. However, to bypass the headaches and red tape of setting up a legal entity, consider using International PEO (Professional Employer Organization).
International PEO gives your business access to an established business infrastructure in Australia—and around the world. An International PEO partner acts as the Employer of Record for your employees, and handles the contracts, payroll, and compliance, while you manage the daily activities of your staff.
Interested in learning more about this method of global expansion for Australia hiring? Get in touch with Velocity Global today.