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Sham contracting: compliance checklist for contractors

Contractors in building and construction can use this checklist to assess whether they are complying with laws relating to visas and sham contracting.

Principal contractors in building and construction should consult this checklist regularly to ensure they are meeting their legal obligations.

If you have any doubts about your compliance with any Australian law, you should seek independent legal advice.

It is best practice for principal contractors to provide this checklist to subcontractors as part of the engagement process.

Sham contracting compliance checklist

  • Does your organisation have policies, procedures, plans or systems in place that help you meet your legal obligations to ensure:

    • workers have a legal right to work in Australia
    • the avoidance of sham contracting

    For principal contractors only:

    Does your organisation:

    • investigate substantial price differentials identified in the tender phase, and commit to investigate all pricing to ensure the legal engagement of employees and sub-contractors
    • have monitoring and auditing processes set out in management plans and company quality systems
    • require a statutory declaration for progress payments that demonstrate compliance with relevant legal obligations 
  • Does your organisation have policies, procedures, plans or systems to ensure compliance with the following legislation:

    • Commonwealth workplace relations legislation (including the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) and where applicable the Code for the Tendering and Performance of Building Work 2016 and the Fair Work Act 2009 (Cth))
    • Long service leave (including the Construction Industry Long Service Leave Act 1997 (Vic) and Long Service Leave Act 2018 (Vic))
    • Labour hire laws (including the Labour Hire Licensing Act 2018 (Vic))
    • Occupational health and safety (including the Occupational Health and Safety Act 2004 (Vic))
    • Workers compensation (including the Workplace Injury Rehabilitation and Compensation Act 2013 (Vic))
    • Superannuation law (including the Superannuation Guarantee Administration Act 1992 (Cth))
    • Immigration law (including the Migration Act 1958 (Cth))
  • Does your organisation only employ employees in accordance with an enterprise agreement approved by the Fair Work Commission, modern award or employment contract?

    Does your organisation have policies, procedures, plans or systems in place that allow employees to access information about the relevant enterprise agreement or modern award?

    In the past 24 months, has your organisation made the following payments relating to minimum wages and employment conditions:

    • wages, including penalty rates, overtime and casual rates
    • allowances
    • annual leave
    • long service leave
    • superannuation
    • workers compensation insurance
    • other lawful payments that are specified in a modern award or enterprise agreement, for example, payments made to redundancy funds

    In the past 24 months, has your organisation been subject to any proceeding or findings against it by a court or tribunal for sham contracting?

  • Does your organisation have policies, procedures, plans or systems in place to ensure you meet your legal obligations when engaging employees who have a working visa?

    Does your organisation have the policies, procedures, plans or systems in place to ensure:

    • recruitment teams carry out Visa Entitlement Verification Online system (VEVO) checks before the engagement and induction of all employees
    • commercial contracts contain measures to ensure the obligation for visa compliance is passed down the contractual chain
    • contractual measures are in place to oblige subcontractors to notify the principal contractor of visa non-compliance
    • appropriate compliance training is in place for recruitment teams and hiring managers
    • processes are in place to monitor and audit contractors’ management of visa compliance
    • record-keeping and document management systems are in place to store employee visa details

    In the past 24 months, has your organisation been subject to any proceedings or findings against it in respect of a breach of migration laws?

  • If your organisation contracts part or all of its scope of work to a third party, does your organisation ensure that relevant contractual documentation, arrangements or agreements require that party to comply with their legal obligations?

    For principal contractors only:

    Are your subcontractors required to notify you as the principal contractor of a dispute concerning allegations of sham contracting?

Statement of non-compliance

If you answer ‘No’ to any of the questions in this checklist, please use the space provided in the PDF document below to give a detailed explanation of the non-compliance and the remedial actions you plan to take.

Reviewed 28 July 2020

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