Is Your “Contractor” Actually an Employee? The Supp App Case Every Hospitality Business Should Read

A hospitality shift app called Supp is under scrutiny after reports that workers picking up bar, floor and event shifts through the platform are being engaged as independent contractors, not employees. Some say they’ve missed out on superannuation as a result.

What’s going on with the Supp app?

Supp is a jobs marketplace for hospitality, launched in Melbourne in 2017 by Kate and Cameron Reid, the owners of Lune Croissanterie. Venues post shifts at an hourly rate and workers pick them up on an ad-hoc basis. Supp says around 15,000 venues and 200,000 workers have used the platform across Australia and the US, and it takes a 12% service fee on top of what venues pay.

The catch: Supp requires workers to hold an ABN and treats them as individual contractors rather than casual employees. Reporting has surfaced workers who did years of bartending, waiting and front-of-house shifts through the app, were rostered and managed like any other casual, and never received a cent of super.

Why does contractor versus employee status actually matter?

Because the label on the paperwork doesn’t decide the outcome. The High Court settled this a few years back in the Personnel Contracting and Jamsek cases: what matters is the substance of the working relationship, not what the contract calls it or whether the worker has an ABN.

If someone is really an employee, they’re entitled to things a contractor isn’t: minimum wage, casual loading, super, leave (if not casual), unfair dismissal protection, and workers’ comp cover. Slapping “contractor” on the arrangement doesn’t switch any of that off.

What actually makes someone a genuine contractor?

Courts and the ATO look at the real substance of the relationship, not the label. Ask yourself:

• Do they control their own hours, or are they rostered like everyone else?
• Can they set their own rate, or do they take the hourly rate the venue sets?
• Do they run their own business, with their own equipment, insurance and clients, or do they just show up and follow a manager’s instructions?
• Can they delegate the work to someone else, or do they have to turn up personally?

A hospitality worker who’s rostered for shifts, wears the venue’s uniform, follows a manager’s direction and has no say over pay or hours looks a lot like a casual employee wearing a contractor costume. The ABN doesn’t change that.

What happens if a business gets this wrong?

This is where it gets expensive. Misclassifying an employee as a contractor can mean:

• Back-payment of super, often several years’ worth, plus the super guarantee charge and interest
• Back-payment of minimum wage, casual loading and other entitlements
• Fair Work Ombudsman action, including sham contracting penalties
• Reputational damage if it plays out in the media, as Supp is now discovering

None of this depends on whether the misclassification was deliberate. “We genuinely thought they were a contractor” is a mitigating factor at best. It’s not a defence.

How does this connect to Payday Super?

Payday Super changes the maths on getting this wrong. Once super has to be paid alongside wages rather than quarterly, the gap between what should have been paid and what actually was gets flagged faster, and the penalty regime for late or missing super becomes far less forgiving.

Businesses that have been quietly treating casual-style workers as contractors have had years of buffer to sort it out before anyone noticed. That buffer is closing. If your business engages people through labour hire apps, marketplaces or “contractor” arrangements that look like rostered shift work, now is the time to check, before a missed super payment becomes a compliance event.

What should hospitality and gig-reliant businesses do now?

1. Audit your contractor arrangements against the substance of the relationship, not the paperwork.
2. Look hardest at anyone engaged through an app or platform where the business, not the worker, sets the rate and roster.
3. If it looks like casual employment, treat it as casual employment. Fix it before the FWO or ATO does it for you.
4. Build Payday Super readiness into this review. If you’re getting classification wrong, you’re also getting super timing wrong.

One venue we worked with had been engaging “contractor” bar staff for two years through a booking platform. A quick review showed every one of them was rostered, managed and paid exactly like a casual. Reclassifying them properly before the FWO came knocking cost a fraction of what a back-payment claim would have.

FAQs

Does having an ABN make someone a contractor?

No. An ABN is a tax registration, not a legal test. Courts look at the real nature of the working relationship, including control, hours and who sets the pay.

Can a worker be a contractor for tax purposes but an employee for super purposes?

Yes, and this trips up a lot of businesses. The ATO’s extended definition of “employee” for super guarantee purposes can capture someone paid mainly for their labour, even if they hold an ABN and invoice for their work.

What’s sham contracting?

It’s when a business knowingly, recklessly or without reasonable grounds represents an employment relationship as a contracting one. It carries specific penalties under the Fair Work Act, on top of any back-payment owed.

How far back can a business be liable for unpaid super?

There’s no time limit on superannuation guarantee shortfalls. The ATO can pursue historical underpayments going back years, plus the super guarantee charge and interest.

What should I do if I think we’ve got this wrong?

Get it reviewed properly and fix it proactively. Voluntary correction before a complaint or audit is treated far more favourably than getting caught.

Worried a contractor arrangement in your business might actually be an employment relationship? Book a call with HR Gurus and we’ll cut through the BS and tell you exactly where you stand.