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New Australian Legislation to Protect Gig Workers: How Does it Affect the Construction Industry?

Gig Economy (2)
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New Australian Legislation to Protect Gig Workers: How Does it Affect the Construction Industry?

The gig economy’s impact on the construction industry in Australia is influenced by various factors, including changing workforce dynamics, technological advancements, and the unique nature of construction projects.  

The gig economy has brought about a shift in workforce dynamics within the construction industry in Australia, offering both opportunities and challenges. Construction companies that strategically leverage gig workers can enhance flexibility, access specialised skills, and adapt more effectively to the dynamic nature of construction projects. However, managing compliance, ensuring safety standards, and effectively integrating gig workers into the construction process are crucial considerations. 

The gig economy blurs traditional employment classifications, leading to challenges in defining the employment status of gig workers. Construction companies must navigate employment laws to appropriately classify workers and ensure compliance with regulations regarding entitlements, superannuation, and other benefits. 

The Australian government has introduced new legislation to protect gig workers. A landmark bill titled “Closing Loopholes” is being reviewed by parliament and is expected to come into effect in 2024, with an exact date yet to be set.   

Given the nature of the work, it’s created a grey area for employers and employees. The bill aims to clarify gig worker entitlements, leading to less confusion and disputes. 

The bill will also amend health and safety laws, offering gig workers greater protection.  

Crucially, the bill targets deliberate and intentional underpayment of gig worker wages. ‘Wage theft’ in the gig economy will be a criminal offence, with maximum penalties of 10 years in prison and fines of up to $8 million. 

What does the bill impact? 

The new bill defines “employee-like workers” in the gig economy as those who are “engaged as independent contractors but performing work that is similar to that performed by employees”. This means that gig workers who are classified as employee-like will be entitled to the same standards as regular employees, such as:  

  • Minimum pay 
  • Penalty rates  
  • Termination and ‘deactivation’ 
  • Health and Safety 
  • Superannuation 

If gig workers are unhappy with their employment conditions, the bill also gives them the right to request that the Fair Work Commission set minimum standards. This could include hours, patterns of work, and payment terms. 

Given the nature of the work, it’s created a grey area for employers and employees. Ultimately, the bill aims to unblur the lines of gig worker entitlements, leading to less confusion and fewer disputes. 

What the gig economy bill means for construction employers 

Australia’s modern award system is one of the most complex in the world, making it challenging to pay staff correctly, particularly if a business’s employees fall under multiple awards, each with myriad clauses. 

Additionally, business owners can hire and fire gig workers as needed under the current system. However, with the new legislation, gig workers will get more notice before termination, meaning some employers will lose flexibility in workforce management. 

What should business owners do?  

Here are some proactive steps that business owners can take to prepare for the new legislation:  

  1. Review your contracts with gig workers to ensure they comply with the new regulations. 
  2. Set up a system for tracking the hours and earnings of gig workers; here are some things to consider: 
    • What impact will this have on your project management software? 
    • What impact will this have on your financial management system? 
    • What impact will this have on your time-tracking software? 
    • What impact will this have on your payroll software and processes?  
    • Does your current software need to be enhanced and configured to cater for any changes?  
    • How will you meet Single Touch Payroll (STP) and Superannuation Guarantee compliance?
  3. Provide gig workers with information about their rights and entitlements under the new legislation.
  4. Gig workers may not be as familiar with specific safety protocols as permanent employees. Construction companies must invest in comprehensive onboarding and safety training for gig workers to maintain high safety standards on construction sites. Review your processes; you may need to move to an online Onboarding and compliance management solution.

By taking these simple steps, business owners can minimise the impact of the new legislation and ensure their company complies with the changes.  

Thrive Technologies are experts in the construction industry and can offer guidance and solutions to meet the requirements of the new gig economy  legislation.

Contact our team today on 1300 868 474 or visit our website www.thrivetech.com.au.