TIIS MPA510 Memo 01 – Semester 01, 2020
Mr. Howe, a Partner of the CPA firm Dewey, Cheatem & Howe (DC&H), after reviewing an audit of “GUBER EATS” by DC&H has become concerned that GUBER EATS is not paying the National minimum wage of $19.49/hr.
When he talked to the manager of GUBER EATS, Mr. Howe was informed that this was not a minimum-wage issue because the international students delivering for GUBER EATS are independent contractors (e.g. they set up companies and registered for ABNs). Also, the $16.50/hr paid for deliveries was a good deal because GUBER EATS provided the bicycles, uniforms, and the insulated food delivery bags. Further, GUBER EATS expects DC&H to treat this issue as a confidential matter (i.e. to not involve the authorities—Worksafe, Superannuation, ATO, Fairwork Ombudsman, etc.).
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Review the above issue, go to the internet and gather appropriate information to prepare a memo resolving the issues. NB: in your discussion you will need the:
• ATO definition of a contractor vs an employee – NB: what suggests an employee rather than an independent contractor (e.g. hourly wages vs. fee for service),
• Effect of GST, Worksafe premiums, Superannuation fees, etc. on what the hourly wage that should be paid,
• Issue of confidentiality is a side issue, but it is still an important consideration.