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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 22969
Experience:  38 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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We are a scaffolding company and have had one guy working as

Customer Question

We are a scaffolding company and have had one guy working for us as a contract for almost a year, and another one started around 3 months ago as a contract. Their tax code is WT, so we withhold 20% tax and don't pay them holiday pay etc. The one worker who has only been with us for 3 months has asked for a payrise, and because we are not happy with his work anyway we have said no and he said he will look for more work so we agreed that is best. Now he is saying we are being illegal by not paying him holiday pay, kiwisaver etc, but we did explain from the start he is employed on a contract basis only and have never given him a contract or anything.
I just want to make sure we are acting legally? The only thing we did not do is get him to sign the ird form which authorises us to with hold the 20% tax. I thought we had a signed form from him but cannot locate.
Submitted: 1 year ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 1 year ago.

He needs to have a written contract which sets out the terms of his contract and that he is self employed and responsible for his own GST, tax and other self employed payments. You are at risk if you dont have a contract which explains this, because otherwise he may be able to say he is an employee, and if he succeeds in showing this, then you would be liable for holiday pay and other wage related payments. If you do have a contract then you are in the clear

Customer: replied 1 year ago.
Ok well we have not go that so obviously need to make sure we do this. When you say a contract, does it mean something the other person has to sign before working for us, or is it acceptable for us to provide each new employee with our contract so they have something in writing and know what is expected of them? Also, is it acceptable for us to continue to employ contractors when they are averaging 40 hrs a week and working for us for months on end, or at that stage should they be fully employed by us?
Expert:  Chris The Lawyer replied 1 year ago.

It's best to give them a written contract when you offer the job to them. If you have others already on board you can get them to sign now