By Michael Botur

The post-Covid economy brings a lot of benefits. While inflation is worryingly high, wages have risen, too. Unemployment is at a record low of 3.4 per cent, which could mean that if you risk starting a business and it doesn’t work out well, you can easily return to being employed by another company.

It also means you have to honour your employees’ rights and keep perfect records to stay compliant so your business doesn’t fall apart due to an HR compliance oversight.

Ready to look at the requirements for starting your own business? Let’s talk through it.

1. Decide on the structure that works best for your business plan

Sole trader – this would give you, as the only person operating the business, full control.

Company – this is a more complex option. It limits your personal liability, it’s a separate legal entity – and tax, reporting and GST requirements come with it.

Partnership – this means two or more people distribute income or losses.

Trust – run by trustees, responsible for business operations.

2. Find which licences and permits you may need (regulations, council approvals, compliance)

The Australian Business Licence and Information Service can help identify the licences and permits you may need. Their workflow-guide is available on this website.

3. Keep up with your tax obligations begins from day one

If you’re running a home-based business, there are specific tax obligations which have to be followed. While we cannot advise on accounting, HR Assured can advise upon allowances, reimbursements and travelling for work as these points are tied in with Modern Award conditions.

HR Assured’s Telephone Advisory Service team will clarify if your tax questions are best answered by Business Australia or an accountant. Setting the correct tax rates and putting aside superannuation and other entitlements for your staff, colleagues and business is something we’ll get to shortly.

4. Fun part – choosing the name of your business

Business doesn’t have to be boring and scary. In Paddington, Sydney, there’s a jewellery shop called The Family Jewels. Around the world, we have a bakery named Bread Pitt, a fish and chip shop called Frying Nemo, and there’s even a professional laundry service named Iron Maiden. Choose a great name. As for the topic of search engine optimisation, marketing aptitude, and checking that you haven’t infringed on someone else’s business name –you’ll need to contact a business specialist for that side of things. Meanwhile, HR Assured has guidance on the next essential HR steps.

5. Engrain Workplace Health and Safety from day one

Different workplaces come with different risks. If somebody is injured or killed at your business, your Workplace Health and Safety (WHS) setup will come under close scrutiny and you may be held criminally liable. That means not just massive fines, but people in your business potentially being convicted of a criminal offence – with penalties or even prison to follow. Ensuring your business is WHS compliant requires an initial workplace audit including a comprehensive assessment of WHS compliance. From there, HR Assured gives practical, easy-to-follow recommendations – with all WHS questions answerable over the phone, 24/7.

6. Hire employees – and maintain HR compliance from day dot

There are a number of core “best practice” measures that all employers should follow when employing a new staff member. Don’t think of these measures as red tape. The best mindset is to focus on how your business will benefit from adopting a streamlined employee induction process. It’s a chance to ensure your business values and objectives are explained to your new employee. HR Assured offers a sample employee induction checklist to ensure your staff inductions run smoothly.

The checklist – while only a sample – has a strong legal underpinning. Seek guidance on getting the onboarding of your employee correct, because oversights could lead to penalties.

7. Understand the crucial difference between an employee and a contractor

It’s important to determine if you, or the people you’re working with, are contractors or employees. It’s a significant question because the Fair Work Ombudsman – with the Government behind it – is increasingly intolerant of what it defines as ‘sham contracting’. Sham contracting is when an employer declaims its responsibility for providing employment.

  • The definition of a contractor: An “independent contractor” is a person (or organisation) engaged by way of a “contract for service”.
  • The definition of an employee: According to established employment common law concepts, an “employee” is a person who is engaged on a “contract of service.” Such a contract may be express or implied, oral or written and may be regulated by an industrial award or agreement.

HR Assured can help you gauge the distinction and avert FWO penalties for not paying your workers what they’re owed. HR Assured will also help you work out correct wage minimums, Awards and rates. This will require an HR Audit in your early stages with us to set you up for lasting success.

8. Keep required employment records

A software tool is an ideal way to ensure you’re not inadvertently keeping records in the wrong manner, or failing to keep the correct records.

The workflows found in HRA Cloud – which is the software underpinning HR Assured – guide you through the requirements about which  HR information and records you must collect about employees.

HRA Cloud will help keep you compliant when it comes to:

  • Keeping records for the correct amount of time
  • Ensuring your records aren’t inaccurate or incomplete
  • Make sure the following applicable details are within your employees‘ records:
  • Employee name, starting date, employment type.
  • Employer’s ABN, if applicable.
  • Pay details and rates.
  • Pay deductions.
  • Details of incentive-based payments, bonuses, loadings, penalty rates or other monetary allowances and separately identifiable entitlements paid to the employee.
  • Hours of work details.
  • Details around overtime, averaging of hours.
  • Leave details and entitlements.
  • Superannuation details.

9. Lastly, ensure you’re setting aside superannuation and entitlements for your staff

At regular intervals, you’ll need to:

  • Work out how much superannuation to pay on behalf of your employees.
  • Report and pay superannuation contributions electronically using the SuperStream standard by the due date, to avoid charges for breaching the Super Guarantee (SuperStream is the format and way businesses must pay employee superannuation guarantee contributions to super funds).
  • HR Assured has a wealth of templates, resources and knowledge around correct handling of superannuation for business owners – and we always keep businesses and ourselves up-to-date as superannuation changes come in each year.

10. Pat yourself on the back and go for gold

Ready to do business? Terrific. If you’re self-employed, there are a number of things you need to do to stay compliant with employment laws. As your success increases along with your staff numbers, we have a terrific range of advice about growing a start-up business and staying compliant with HR requirements on this helpful page.

If you do find you need over-the-phone advice, make the most of a no obligations, in-depth employment advice telephone consultation of up to 30 minutes, during which we’ll examine your issue in detail and present you with every possible option.

Of course, we’re hoping you’ll love our service so much you’ll become a client. But if you don’t, that’s ok too.

Simply click through to book your HR advice phone call.

Good luck starting your business!

Michael Botur is a copywriter and works for FCB and HR Assured. Based in sunny Northland, New Zealand, Michael’s passionate about shaping words to give audiences persuasive stories – sometimes for sales and marketing, other times for journalism, art or entertainment.