By Greg Allan, tradesman and creator of Data First Coaching
Why do stonemasons get this wrong so often?
Most stonemasonry businesses run on a mix of piece-paid fabricators in the workshop and on-site installers who send an invoice with an ABN on it, so the business assumes the label “subcontractor” settles the question. It does not. Whether someone cutting, polishing or templating for a stonemasonry business is actually an employee depends on the whole working arrangement, not what the invoice calls them.
During a benchtop rush before a kitchen handover, or a bigger cladding or paving job, a workshop owner often brings in extra cutters, polishers or install crew to keep up, and pays them against an invoice because it is quicker than putting them on the books. The trouble starts when that arrangement looks, in practice, like employment: set hours, supplied tools, no ability to send someone else to finish the slab, no real commercial risk if the job runs long. Stonemasons are not alone in this, but because so much of the trade's labour is piece work, per slab, per metre of benchtop, per memorial, the subcontractor label gets reached for quickly and rarely checked again once the business grows.
What happens if a stonemasonry business gets the classification wrong?
Getting it wrong can leave a stonemasonry business owing back superannuation, exposed to a workers compensation claim it did not think it was insuring, and facing a sham contracting claim if a worker who was really an employee was told they were a contractor. None of these risks disappear because the worker had an ABN.
According to the ATO, a business is responsible for classifying each worker correctly for tax and super purposes and may face penalties if it gets this wrong, see Difference between employees and independent contractors. Separately, the ATO's superannuation guarantee eligibility rules say an independent contractor paid mainly for their labour, such as a polisher or installer working for a stonemasonry business, can still be owed super guarantee even though they quote an ABN, see Work out if you have to pay super. The Fair Work Ombudsman explains that misrepresenting an employment relationship as a contracting one can be penalised, and that employers now need to show their belief the worker was a contractor was reasonable at the time, see Independent contractor changes.
How does a stonemasonry business tell a subcontractor from an employee in Australia?
You work it out by looking at the whole working arrangement between you and the person cutting, templating, polishing or installing stone for your business, not by what the paperwork calls them. The ATO says no single factor decides it on its own, who supplies the tools, who controls the hours, whether the worker can send someone else to finish a job, and who carries the commercial risk, all matter together.
Picture a stonemason who engages a templater on a day rate, supplies the laser measuring kit, sets the start time and tells them which sites to visit each day. That looks like control and supervision the business directs, which points toward employee, whatever the contract is titled. Now picture a CNC operator who owns their own cutting rig, quotes per slab, sets their own hours and works for several fabrication shops in the same week. That looks more like a genuine contracting relationship. According to the ATO, you need to review the whole arrangement for each worker, because the answer can be different for the polisher, the install crew and the office admin even inside the same stonemasonry business, see Employee or independent contractor.
Many stonemasonry businesses find this easier to keep straight once an AI agent, software that does a job the way the owner would, with their own prices, wording and rules, is logging each worker's actual pattern, hours, tools, invoices, against their file, rather than relying on whoever set up the arrangement years ago remembering why.
Does calling someone a subcontractor with an ABN protect you?
No. The ATO and New South Wales's workers compensation regulator both say that simply writing “subcontractor” in a contract, or a worker quoting an ABN, does not decide their status, and a person can be a contractor for tax purposes while still being treated as a worker for workers compensation insurance.
In New South Wales, SIRA's worker or contractor status tool explains that a principal contractor can remain liable for a subcontractor's workers compensation premiums unless it holds a current written statement confirming the subcontractor has their own cover, which matters to any stonemasonry business that regularly sends install crews or polishers onto a builder's site, see Worker or contractor tool. Victoria's WorkSafe applies a different, deeming test under its own claims manual to decide whether a contractor is treated as a worker, so a stonemasonry business operating in more than one state cannot assume the same arrangement is read the same way everywhere, see Define a worker. Where a stonemason subcontracts specialist work, such as cladding or restoration, as part of a larger building contract, New South Wales Fair Trading also requires that work above a set value to be carried out by someone holding the right contractor licence for that category, see General building work.
What about apprentices, labourers and trade assistants in the workshop?
They are always employees, never contractors, no matter what the paperwork says. The ATO is explicit that apprentices, trainees, labourers and trade assistants are always employees, which settles the question for the junior hands loading slabs, sweeping dust or running the polisher under supervision in a stonemasonry workshop, see Hiring a new worker.
This matters because some stonemasonry businesses, juggling dust and silica safety requirements and award pay rates, label a junior cutter or trade assistant a casual subbie to simplify the paperwork. That does not change their status.
Working this out once is rarely enough. A stonemasonry business taking on more apprentices, templaters or install crews through a busy benchtop season needs to track who is doing what role, whose tools, whose hours, against the worker's actual working pattern, not against memory of how last year's subbie worked. That tracking is exactly the kind of non-billable paperwork AI agents can take on, checking each worker's pattern against the arrangement on file so the owner is not re-deciding from scratch every time guidance updates. Starting from the business's own job and pay data, data first, rather than from memory of who normally sends an invoice, is what keeps the classification current as the crew changes.
This is general information, not legal, tax or employment advice. Check your own situation with the body named here or a qualified adviser.
Where can you check the current rules?
- Difference between employees and independent contractors: the ATO's starting point on who is responsible for classifying a worker correctly.
- Employee or independent contractor: the fuller ATO guidance on reviewing the whole working arrangement.
- Independent contractor changes: the Fair Work Ombudsman on sham contracting and the new definition of employment.
- Worker or contractor tool: New South Wales's SIRA on workers compensation status, separate from tax status.
- Define a worker: Victoria's WorkSafe deeming test for contractors treated as workers.
- General building work: New South Wales Fair Trading on licensing for subcontracted specialist work.
- Hiring a new worker: the ATO on apprentices, trainees, labourers and trade assistants always being employees.
- Work out if you have to pay super: the ATO's super guarantee eligibility rules for contractors paid mainly for labour.
How does Data First Coaching approach this?
Data First Coaching starts by looking at who is actually on a stonemasonry business's books, as a contractor, apprentice, casual or crew member, and lines that up against the business's own job and pay data in the Trade Business Intelligence, rather than taking the owner's description at face value. Often the real question is not whether one worker counts as a subcontractor, but why the business never set the pattern down in the first place. Greg Allan built his own trade business before coaching stonemasons and other trade owners, and the how, setting up the records and the agents that keep them current, is worked through inside the Academy, with members, because the Trade Business Intelligence is powered by every member who joins open minded and willing to share.
