Son Is Working Casual Helping a Fishing Business, Needs an ABN. Help Please

PVA on 26/11/2017 - 22:55

Our son is helping a family fishing business with some casual work. The business is my wife's sisters sons ( phew).

They just want him helping their small business sometimes, on their boat, setting up crab pots etc.
Not great work at all but gives him something to do and a few dollars.
It's , maybe, 15 hours a week, can be all times, day or night, seems to be around 3 - 4 hours a go.

Now the thing is they want him to have an ABN and be like a contractor I guess.

What implications does this leave our son if he does this. It's all too confusing and seems un needed for such small hours that may end at any time ( especially when our son gets a proper full time job).

He's only just out of school, it's tough work ( but he likes it) , appreciate the family asking if he wants to work.

BUT, the pay is crap $15 an hour ( which cash in hand would be OK but not legal, but going through whatever ABN and its issues and book keeping, taxes etc, just doesn't seem worthwhile.

What do you think, it just seems too much for little money.

We need som whelp please.

Education & Work

Comments

  • dasher86 on 26/11/2017 - 23:03
    +6

    $15 cash in hand is not illegal if it's properly declared.
    ABN is a tricky situation as they are basically saying that he is not an employee of the company and don't have to pay him employee entitlements and he is not covered under their work cover insurance policy.
    It's an odd situation for a family member to put your son in.
    The relationship still seems to be a direct employee though.
    ABNs are easy to get but if something goes wrong your son could get screwed over.

    • PVA on 26/11/2017 - 23:11

      Thanks, this is kinda what we are thinking.

      • HighAndDry on 27/11/2017 - 11:25

        People in this thread are too melodramatic and just trying to validate the worries you showed in your OP. But they're going overboard.

        Yes - your son is going to be an independent contractor and won't have employee benefits, etc, and no, $15/hr isn't a great rate. But for something as casual as "come in for a few hours today" every couple of days, and in an industry like fishing, this is nothing out of the ordinary.

        • PVA on 27/11/2017 - 11:33

          What do you think we should do.
          Abn is so foreign to us, no idea what to do.
          Sons not concerned, but he also has no idea what they are talking about.

        • HighAndDry on 27/11/2017 - 11:41

          @PVA:

          First up, a tangent - commercial fishing is relatively more dangerous than a lot of part-time/casual jobs (flipping burgers only poses risk of oil burns, for example). Personally, no amount of Worker's Comp changes that fact and I don't think it'd be much consolation if, knock on wood, something were to happen.

          BUT - if your son, and yourself, are both okay with the level of risk the job entails, then directly regarding having an ABN:

          1. It allows your nephew to pay your son more in terms of net: PAYG (income tax) and super aren't added to the pay, it's deducted from the total amount.

          2. As others have said, whether your son has an ABN or not, or is paid as a contractor or not, won't affect his rights under the law if it comes to that (again, knock on wood).

          3. It does make things easier for your nephew, but at this amount, it also makes things easier for your son.

          And getting an ABN isn't that hard. I've had to get an ABN in the past, and then a few years later re-activate it for another gig. Took maybe an hour of my time each, tops. So personally, I wouldn't worry about the ABN aspect: the physical risk of the job would be a bigger consideration.

  • robbyjones on 26/11/2017 - 23:07
    +6

    Your nephew seems to be ripping off your son. An ABN means he wants your son to invoice him which means your son is a contractor and not an employee and your son has to cover his own super (although probably not payable anyway) and workers compensation. It may not be an issue unless your son injures himself and then could be costly.

    Edit: pretty much a dupe of the comment above, which was posted whilst I was composing mine.

    • PVA on 26/11/2017 - 23:17

      Thanks for this. It really seemed over the top for what he does.

      Well have to try and explain this to our son, as really he has no idea ( nor do I) .

      It started that they just wanted him to help out, fishers wife is pregnant, can't do the work himself. Now it's bigger than Ben hur and I thought just not needed for $15 per hour, 15 hours or so week. It's not even scheduled, they just call, hey can you work 3am tomorrow thanks.

      Don't know what to do, he's getting a few dollars, and of course how do you explain it to the fisher?

      • robbyjones on 26/11/2017 - 23:25
        +1

        That's a really tough situation, almost a no win. This might be easy for me to say however I would want to protect my son (even though he probably wouldn't see it like this) and have a quiet word with the "fisher" saying that as much as your son is eager to help out you are concerned that by providing an ABN it absolves his rights to compensation should he be injured and as it's your job to protect him you feel working as an employee would be best. It may be that the job will fall through because there is no way that paying $15 per hour would be the correct pay for the work at the time of day that would be required and the fisher may not be able to afford the correct pay. The other option is to look at the cost of insurance as an ABN holder, it may not be that expensive.

        • PVA on 27/11/2017 - 00:33

          Thanks for this.
          We are going to say to our son about no abn and pretty much what you say.

          It's just not worth it for $100-200 a week.

  • Donaldhump on 26/11/2017 - 23:08
    +4

    Surely they can just pay him cash.

    • PVA on 26/11/2017 - 23:12

      Thanks.

      • HighAndDry on 27/11/2017 - 11:26

        Having an ABN instead of getting cash in hand is honestly MORE above-board for both parties. This is your nephew-in-law trying to do the right thing, NOT trying to be shady. People in these comments are crazy.

    • [Deactivated] on 26/11/2017 - 23:14
      +2

      and what happens if there's a work accident, especially an inexperienced person working on a boat.

      • Donaldhump on 27/11/2017 - 07:48

        risk he takes by getting paid cash. can always insure himself.
        if he wants a proper job being paid as an employee, needs to find a job paying as an employee. This company clearly does not want to.
        I have done cash jobs when i was younger, risk i took, if i got hurt tough luck.

      • HighAndDry on 27/11/2017 - 11:47

        Then Worker's Comp would kick in or not, depending on his ACTUAL characterization as an employee or contractor, and the ABN or lack thereon won't make a jot of difference.

        At that point though - the risk of injury is a far larger consideration than anything to do with the ABN.

        • PVA on 27/11/2017 - 12:29

          Do you mean he's covered as he only has work with this fisher, so he would have employee rights for compo?

          It's not a huge fishing boat, it's a size a bit bigger than a tinnie, fishing is all in Broadwater/ mangrove type areas, not out in the ocean.
          Fish, crabs, bait worms yabbies etc.

          I guess it can be dangerous but nothing like big trawlers.

        • HighAndDry on 27/11/2017 - 12:34
          +1

          @PVA: Ah fair enough. No - worker's comp covers employees not contractors. But it depends on the reality and facts of your son's work whether he's covered or not, and not on how he's labelled a contractor or not, or whether you son has an ABN or not.

          Basically - just getting an ABN won't disqualify your son from being covered by worker's comp if he'd otherwise be covered.

  • Slippery Fish on 26/11/2017 - 23:25
    +4

    wife's sisters sons ( phew).

    My sister in law's son. Or by the sound of it the family scum. He doesn't want to pay work cover, either it's family cash job where you know he will look after your son or he pays as a employee.

    I wouldn't be doing the ABN thing :/ lots of headache for small money.

    And if your son gets injured who picks up the tab?

    • PVA on 27/11/2017 - 00:30

      Yeah, I thought they were doing a favour and giving him a little work but I guess not. Unless they have bigger plans for him but I don't think so, it's just a two person commercial fishing business.

      • HighAndDry on 27/11/2017 - 11:27

        Yeah, I thought they were doing a favour and giving him a little work

        They honestly are. People here are just jumping to conclusions, and then validating each other's wrong conclusions, and then feeling good about themselves. The above comment for example:

        "Or by the sound of it the family scum."

        Completely out of line and incorrect.

        • PVA on 27/11/2017 - 11:48

          You sound positive around this. I really appreciate it.

          Our son has had a few jobs , Hungry Jacks etc. Did have a job at Telstra store for 2 months, replaced a girl that left, was doing banking and heaps other stuff for the store owner, he really liked it but then the girl returned and they said see you later boy. Really upset him and has got him down about work. Even an RSL making coffee was 2 days of interviews and role playing, crazy.

          Anyone on the Gold Coast needing a good man to work for them let us know.

          So , the fishing may be a crap job but it's completely different to anything he's down before and seems to like it.
          They did mention things to him about later driving their ute for deliveries to markets etc.
          as mentioned, it's something for him while he works out what he really wants to do ( whatever that is, he's lost at the moment)

          ABN part is scared for a young kids ( and parents). Son will go with the flow but doesn't know what it involves and prob too shy to ask them for more money etc.

        • HighAndDry on 27/11/2017 - 12:52
          +1

          @PVA:

          Haha, I don't want to be overly-positive either - I wouldn't want to push you or your son to decide one way or another. But I also didn't like the tone of a lot of previous comments which were unnecessarily dramatic. Applying for an ABN might seem daunting, but it's a very standard and straight-forward process, and you shouldn't be scared by it at all. Not until your son is making so much that he needs to report that income himself - but I can't imagine that $15/hr for a few hours a week could possibly push him over the threshold.

  • KangaBanga on 27/11/2017 - 01:21
    +5

    So long as income/year does not exceed $75,000 you do not need to do anything extra for your taxes, just do it like you would if you were paid as an employee. Also no need for GST. You can get one easily online via ATO website. Easy as, not as complex as you are making it out to be.

    I have an ABN as well when i work casual at some companies. Only extra thing is you have to write/print out and invoice listing days and hours worked so the other party can do their taxes lol…

    Your son will probably be more comfy working at maccas or KFC, but where's the fun in that? :D The good thing about this job is that he is helping out family. He'll probably be bringing home heaps for yummy crabs everytime he goes out :)

    • PVA on 27/11/2017 - 11:37

      Did you organise your own insurance?

      You can claim a car as business to get to the work site?

      • KangaBanga on 27/11/2017 - 18:09
        +1

        nope, i just have my own health insurance, no work cover type. my line of work does not involve dangerous stuff anyways.

        technically you can claim car mileage and expenses as a business, but then you have to proportion it to how much you use your car for work vs private use. I just dont claim that as its not really much (i do my own engine oil changes and basic car maintenance and my work only takes me 10 or 20ks away) and you have to keep records of every trip you do to work which I find a PITA :D And if tax office wants to check they can withhold your tax and request for the documents.

        I also do my own simple taxes online every year so dont want any additional tax stuff to complicate things.

        The best thing since its your relative, just ask them to pay $15/hr cash, no need for any paperwork. Failing that just ask them to pay your son in crabs :D Fresh crabs are so yum!! Might even get some lobsters or crayfish :D

  • chumlee on 27/11/2017 - 07:00
    +3

    Sounds fishy.

    To me it comes across as a sham contract but I don't have the full details.

    Maybe do a bit of googling on it but start here

    https://www.business.gov.au/info/plan-and-start/start-your-b…

  • coin saver on 27/11/2017 - 08:41

    This should give you a guide as to whether he is a contractor or employee.. https://www.fairwork.gov.au/how-we-will-help/templates-and-g…

  • mskeggs on 27/11/2017 - 08:52
    +5

    It may be as simple as this is the way they deal with all their workers, so they don't want to setup a payroll etc. system for one person. It is certainly simpler for them, though as noted above, has consequences for insurance and entitlements.
    I don't think it is a big deal, as it is common practice for a lot of service businesses to engage staff this way. I don't know if it is routine in maritime industries. You should note that the rationale behind allowing this type of contracting was to pay the contractor higher than award wages would be, to cover their other entitlements. If they are paying below award, which $15 an hour is if he is an adult, then it is a bit rough.

    • PVA on 27/11/2017 - 09:31

      Thanks for this.
      I'm thinking maybe it is normal as a contractor but surely not $15 ph.

      It was just going to be a little work over the Christmas period. A lot of hassle for that.

  • coin saver on 27/11/2017 - 09:13
    +6

    Some key facts from this ATO link
    … "If you pay an individual contractor under a contract that is wholly or principally for the person's labour, you have to pay super contributions for them".
    …"Having an ABN makes no difference to whether a worker is an employee or contractor for a job"
    …"The length of a job or regularity of work makes no difference to whether a worker is an employee or contractor".
    …"Submitting an invoice for work done or being 'paid on invoice' doesn't make a worker a contractor."
    https://www.ato.gov.au/Business/Employee-or-contractor/Myths…

    • apairofsocks on 27/11/2017 - 10:29
      +1

      +1 for mythbusting.

      Businesses sometimes request or pressure a worker who is an employee to obtain an ABN in the belief this will make the worker a contractor. Often these businesses attempt to disguise the employment arrangement and make it look like contracting to avoid their PAYG withholding and super obligations.

      If the working arrangement is employment, an ABN will not make the worker a contractor.

      Most informative link.

      • HighAndDry on 27/11/2017 - 11:29

        The only difference it makes is that your son will get LESS net pay if he's an employee. That's bad for both your son and your nephew, but good for the ATO. The Tax Office isn't your friend. It's not anyone's friend.

        • [Deactivated] on 27/11/2017 - 11:48

          Less than $15 an hour?
          That's shit.

        • HighAndDry on 27/11/2017 - 11:50

          @Drew22: We don't know how old OP's son is (seems to be just out of high school?), and it's working casually. $15/hr is pretty okay money. Not great, but far from terrible especially if it's effectively net pay, which, if he was paid as an employee with PAYG and Super, would be something like $18-$20/hr gross.

        • [Deactivated] on 27/11/2017 - 11:55

          @0blivion:

          Sounds like they're trying to make the $15 gross.
          You beat me to the age question, I was too lazy to edit my post.

        • HighAndDry on 27/11/2017 - 12:17

          @Drew22: Thing is: If OP's son is paid as a contractor, $15/hr gross IS $15/hr NET too. Because there's no PAYG and no deduction for super.

          OP's son then just declares to ATO (if he wants to) that he doesn't make enough to pay income tax OR have to make mandatory contributions to super, and that's that. If he doesn't want to, he doesn't have to and so long as he doesn't owe ATO any tax (again, depending on his total income level), ATO won't care.

    • one man clan on 27/11/2017 - 11:03
      +1

      Definitely sounds like they are trying to set him up as a sham contractor to avoid a bunch of requirements. I doubt a young kid (what is he, 17?) would meet the indicia to be a contractor - it's not like he's running a trade or having his own tools or independence, and I'm sure he's under strict instruction.

  • dasher86 on 27/11/2017 - 10:02
    -1

    not sure if this link is still relevant but this looks like the award your son could fall under.

  • Hardlyworkin on 27/11/2017 - 18:47
    +1

    Maybe see what else your son can get out of the situation if the pay is dodgy.. maybe throw some free seafood your way?

    Otherwise can it help with his future? Maybe he could the hours logged. This would help down the track if he wanted to get a commercial coxwains. Maybe this could lead to some proper paid work work else where.

    Other than sorting out the question of accident insurance, is he going to be doing something more constructive with his time if he wasn't out fishing and can this situation be beneficial to your son?

    If I was the guy in charge I would have your son on an ABN too.

  • [Deactivated] on 28/11/2017 - 07:55
    +1

    I would personally steer well clear of this arrangement as you have laid it out. I worked in industrial relations for a number of years and have never seen a scenario like this work out well for the "contractor".

    It is highly unlikely that, under the law, your son would be considered a contractor. (See link below) As such, the sister in laws son is leaving himself open to problems if things went pear shaped for some reason.

    My experience would lead me to believe that the in laws son is either ignorant to the laws or is consciously brushing them aside to save some money and make it easier for his paperwork. At the very least he is avoiding paying Superannuation and some forms of payroll taxes. As stated above, the majority aren't gonna feel too bad for the taxman but your son should start building Super asap.

    It is good to keep in mind that once that work arrangement is agreed to, ALL protections for employees (which your son will not legally be) that are provided for under the Fair Work Act will not apply. It is possible to regain those protections, but the amount of bureaucratic bs that it would take would most likely make it not worthy of pursuing.

    There is a HEAP of info related to this topic via a quick google search, but check the link below to get started.

    https://www.fairwork.gov.au/how-we-will-help/templates-and-g…

    • HighAndDry on 28/11/2017 - 11:31
      +1

      It is good to keep in mind that once that work arrangement is agreed to, ALL protections for employees (which your son will not legally be) that are provided for under the Fair Work Act will not apply. It is possible to regain those protections, but the amount of bureaucratic bs that it would take would most likely make it not worthy of pursuing.

      Sigh. You've worked in industrial relations "for a number of years"?

      The above is not true. The law looks at the facts of the matter, not how people label it. Even if you call someone a contractor - if the work they're doing and the relationship is one of employer-employee, legally they'll still be an employee for all legal intents and purposes.

      • PVA on 28/11/2017 - 11:36

        Thanks mate.

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