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DID YOU KNOW

Important points & info

CMC's will generally not engage in any recruitment activities. Recruitment companies, especially newly established recruiters, form part of the client base.

Some CMC's may run job boards or contractor lists for the benefit of their clients.

Hybrid business models, where the recruitment and engagement activites are split between specialist organisations are increasingly becoming popular.

Courts are increasingly examining single director companies for compliance to Personal Services Income (PSI) legislation in Australia.

Core Benefits to clients using a CMC.

Allows organisations to focus on core business activities.

Reduces risk under full engagement model as the contractors are covered by the CMC's insurances.

Generally advise and structure the engagement model to be the most tax effective possible.

Employers and Agencies Information.

So what does contractor engagement mean to you as an agency or employer? Typically, under a full engagement model, the CMC becomes the legal engager of that individual. This may be under a standard PAYG (employee) arrangement, or it may also be under a sub-contractor arrangement depending on what is deemed best for all stakeholders. Applicable insurance coverage is granted depending on the engagement method.

Contractors fully engaged through the CMC are normally able to access value added and discounted partner services. Some CMC's also include online services such as timesheeting, leave management and payslip reports. This will enable you to offer your employees and contractors a potential higher level or service than currently available, for far less than it would cost you to develop internally.

You should always discuss tailoring the engagement model to your business preferences and the level of involvement in the process, whilst gaining advice on avoiding any pitfalls which may increase risk or non-compliance.

Payroll Financing.

Although there exists a range of service model options, one of the most popular options chosen is the fully engaged and financed model.

Under this arrangement, the CMC takes on all legal, administrative and risk responsibilities of engaging the worker and, in addition, arranges payment for the worker on their agreed regular payroll cycle. They will then invoice your clients for the processed payroll on agreed terms. This helps to ensure a smooth payment process and assists your clients with their cashflow planning. Like any business service charges the agreed service fees are tax deductible as a business expense, further increasing the value gained.

Finance is generally offered as an optional service and normally assessed against standard lending criteria and only offered to approved applicants.

Online Services

Many CMC's now offer increasingly complex online services to both clients and contractors.

Standard industry online service offerings include:

  • Timesheeting – Both submission and manager approval
  • Leave Management – Tracking, requests and approval/denial
  • Documentation – Payslips, forms, newsletters, etc
  • Reporting – Requests and uploading of standard and specialised reports
  • Associate Details – Updating of personal details
  • Planning – Calendar overview of leave taken/planned
  • Grouping – Views for both individual and whole work groups

These services assist agencies and employers who have clients or contractors with remote locations. It also streamlines the reporting and approval process, which should save administration time and expenses.
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