By Heidi Bruce and Emma Farncomb

There have been some significant shifts in the legal considerations for engaging talent and crew in recent times. For those businesses that engage talent and crew for advertising productions, they already have to traverse a complex set of requirements, and there is quite a lot of grey area. If you have been feeling like this area is challenging in practice, we hear you! Given the noise in the industry, businesses are looking for ways they can realign their practices. As such, it is a good time to talk about these issues and where things are at legally.

There are complex overlapping considerations when it comes to the legal treatment of tax, super, workers compensation and other employment related obligations. Recently, the industry has become more aware of the risks and uncertainties associated with these legal developments.  Some businesses have adapted to the changes, introducing tighter processes and contractual frameworks. Others are continuing to operate in the grey area. Given the inherent practical realities, many businesses have chosen to accept a certain level of imperfection in this space.

One of the biggest areas of concern that has come into the spotlight, has been the uncertainty around engaging contractors, and particularly sole traders with ABNs. It is often assumed that crew and talent will be covered by workers compensation insurance arranged by the agency or producer. However in practice, there may be gaps in this coverage which can, in turn be an issue if contractors do not have their own insurance in place. Often the agencies that are engaging crew and talent are doing so on behalf of clients, and in the service agreements between the client and the agency, there may be obligations on the agency to ensure that they are responsible for the engagement of contractors and for any claims that may arise, and this can often extend to ensuring that any contractors have in place insurance, including workers compensation. Therefore, the agency may be taking on a lot more risk than they appreciate, in engaging resources without having correct processes and documents in place to manage risk appropriately.

Now is a very important time to check your talent and crew agreements, and to check, in particular, your documents and processes for engaging sole traders, contractors, or personnel that may not fall clearly within the scope of a PAYG employee.  Here we look at the overlapping considerations a bit more closely and highlight the legal issues.

There are 3 main ways of contracting with talent, crew and other resources:

1. employ an individual as an employee. You are responsible as the employer for employment related obligations such as PAYG, superannuation, workers compensation and so on.
2. engage an individual via a company. The company is an independent contractor, and is responsible for income tax, super, workers compensation and so on.
3. engage an individual as a sole trader with an ABN. This third situation is the area that has been recently identified as high risk. There are complexities this area, which is now, more than ever, fraught with confusion.

The distinction at law between an employee or an independent contractor is not determined by contract alone. Even if a person is set up as a PAYG employee, this person can be viewed otherwise in the eyes of the law, and they may not be covered by workers compensation. Even if a person is set up as an independent contractor, laws may still deem that employment obligations such as PAYG or super apply. So, an assessment upfront and getting the paperwork right, is crucial.

Due to recent legislative changes in this area (with changes to the Fair Work Act introduced in 2024), whether a person is treated as an employee or an independent contractor, is now decided based on a consideration of the “whole of the relationship”. The contract does not have the final say and this is based on a range of factors. For instance, if a crew member has a high level of autonomy over their hours, control over how their work is performed, and brings their own equipment, they are more likely to be considered a contractor. Whereas, if a performer has signed a contract that reinforces an employment relationship, the employer exerts high control over the performance of the work and the hours, and there is no ability to delegate, this lends itself more to employment.

In certain cases, the ATO deems that PAYG or super obligations apply, even for sole traders with an ABN. We have set out the position on this below.

PAYG

Typically, when a talent, or crew member is engaged as an individual, they are subject to PAYG tax obligations.

Specifically, the ATO expressly requires, that you must withhold a PAYG amount from payments to those who are considered ‘performing artists’ if they are:

• Australian residents; and
• Engaged under a contract to perform in a promotional activity.

This requirement to withhold PAYG from performing artists applies to payments made to individuals, including sole traders. This is a key issue to note, if you engage talent, even if they are sole traders with an ABN, you would be subject to PAYG obligations.

A performing artist includes:

• an actor (including extras), model, singer, or dancer;
• an individual who is engaged in promotional activities because of their sporting reputation (but no longer an active sportsperson); and
• a similar individual who is engaged to use their intellectual, artistic, musical, physical or personal skills.

There are exceptions to this general rule, e.g. if the artist is under 18 years old.

The ATO does not consider the following as performing artists:

• make-up artists, stylists, or photographers;
• individuals engaged primarily because they are well known as currently active sportspersons; and
• musicians and comedians who are performing but not endorsing or promoting goods.

It must also be noted that rollover payments are also considered promotional activities and subject to PAYG withholding.

The ATO takes the position that whoever has the contract with the performer is responsible for meeting all PAYG withholding and super obligations. However, it is possible for the performer’s agent to carry out these functions on the agency’s behalf.

The situation is different if you engage the talent as a company. In that case, the talent’s company is responsible for PAYG, tax, and super obligations.

Superannuation

Similar to PAYG tax obligations above, if you employ an individual performer or crew member as an employee, you are generally responsible for superannuation. Whereas, if you engage with a talent or crew as a company, then that company is responsible for the super.

However, when it comes to independent contractors, care needs to be taken, as this is an area that is often misunderstood amongst the creative industries.

If you engage someone as a contractor, even where they quote an ABN, this does not prevent super from applying. In certain circumstances, independent contractors are deemed by the ATO to be employees for superannuation purposes. You must pay super for contractors who are paid:

• under a contract that is wholly or principally for their labour;
• for their personal labour and skills i.e. not to achieve a specified result; and
• to perform the contract work e.g. they cannot delegate the work.

Also, for specified occupations, you must pay super. These include:

• sportspersons, artists or entertainers paid to perform, present or participate in any music, play, dance, entertainment, sport, display or promotional activity, or similar activity;
• persons paid to provide services in connection with any performance, presentation or participation in these activities (this would cover crew for advertising productions);
• is a person paid to perform services related to the making of a film, tape, disc, television or radio broadcast.

As you can see, the above list will catch most talent, performing artists or crew engaged in relation to productions for promotional activities, as they are deemed employees for super purposes.

Workers compensation

Workers compensation schemes are state-based and there is no consistent position which applies nationally. However, there are similarities across the schemes. Workers compensation benefits are available to:

• workers (mainly covers employees); and
• ‘deemed workers’ (includes some, but not all, independent contractors)

Talent or crew that are true employees, will generally be considered as ‘workers’ and therefore covered under workers compensation. In these cases, it is the employer’s responsibility to take out workers compensation and if there is an injury, it will make the claim. However, independent contractors are not always entitled to workers compensation, and in recent times this has become an issue that is capturing increased attention. We have heard of scenarios where a crew or performer is injured on set, and everyone thought they were covered, but the workers compensation claim is denied, on the basis that they were not an employee or a ‘deemed worker’, but rather an independent contractor. This has exposed unsettling risks for all parties.

In this scenario, the person may still be able to bring a claim against the production company for breach of statutory duty or negligence, and the production company may need to then seek advice as to whether their public liability insurance policy would cover this, but the production company would not have workers compensation to cover this situation. Many in the industry may not be aware of this as a potential outcome and assume if they pay their premiums for their workers, they are covered.

Whether an independent contractor is a ‘deemed worker’ depends on the legislation in each jurisdiction. In NSW, an independent contractor may be a ‘deemed worker’ if they present certain characteristics, including:

• Working predominantly for one customer;
• Not conducting trade or business with other customers; or
• Not delegating or employing other workers to perform the work.

This NSW example highlights that a key feature of a ‘deemed worker’ here, is that the independent contractor has agreed to work mainly for one customer. Given the inherent nature of contract work in the talent and crew sector often involves performing work for multiple clients, and is short term, there is a high risk that such contractors will not be eligible for workers compensation in the event of an injury.

In some cases, an individual may be deemed as an ‘employee’ for super purposes, but still be an independent contractor for workers compensation. This makes it all very difficult to achieve clear rules, even for lawyers who practice in this area!

This is all exacerbated by the commercial realities, which include difficulties in having crew members sign agreements for each engagement, and inconsistent approaches among different businesses, depending on their extent of awareness and risk tolerance.

If there is no signed contract, this makes the situation even less clear. Therefore, those involved with engaging crew, are encouraged to reassess their practices. It has been raised whether it would be appropriate for crew members to obtain their own income protection insurance as a safeguard. Some organisations have also been looking into alternative insurance products for talent and crew, such as obtaining group personal accident cover.

Additionally, businesses are further considering whether to engage talent and crew as employees, to ensure they are eligible for workers compensation. However, there are several important considerations when engaging employees, including PAYG and super, minimum terms and compliance obligations, such as health and safety. This could also include the requirement to comply with the applicable modern award, for example the Broadcasting, Recorded Entertainment and Cinemas Award 2020. However, many agencies are not set up to readily take on these employment related obligations.

If crew is engaged via a company, these risks do not apply as the responsibility falls on the crew company to obtain insurance.

It is important in this environment, to treat contracting with crew or talent on an independent contractor basis with extreme caution. If a contractor is a sole trader with an ABN, there is the risk that they may not be covered under the workers compensation insurance of the agency or production house contracting them. How can those operating in this space best avoid ambiguity in their relationships? There is no simple answer to this question.

When contracting with crew or talent, it would be safest to either:

• engage the person as an individual PAYG employee (highly likely to be covered by workers comp although assessments still need to be made as to whether this is appropriate and ensure contracts are clear on this),
• engage the person via a company (and clearly define that the company is responsible for their own insurance), or
• it may be appropriate to adopt a general position that independent contractors are unlikely to be eligible for workers compensation and to manage this position by exception (i.e. use this only in specific cases).

Some may avoid engaging sole traders with an ABN entirely, given the inherent uncertainties. This could possibly lead to friction with those who rely on this mode of operating, but it is understandable as a sensible way of minimising risk.

When dealing with an individual who is engaging as a sole trader with an ABN, this should only be done where a true independent contractor situation exists, and where the parties are made aware of the issues under workers compensation. A way to avoid ambiguity, is to clarify insurance responsibilities in the agreement and notifying contractors of the need to enter into their own insurance arrangements (where they may likely not be eligible for workers compensation).

Another alternative here is to consider signing up agreements with crew members who are used regularly in your productions, on a fixed term basis (such as a 12 month term), which makes signing up to contracts easier and defines rights and obligations clearly.

This is an important time to re-evaluate whether your old templates and processes are working for your business in today’s climate. It may also be time to re-assess the communications you are having with crew and talent around the ways they are engaged, and take steps to alleviate gaps in cover. This will ensure you are best positioned for compliance and clarity over the obligations of the parties.

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**First published in Talentpay Compliance Review in Oct 2025, distributed to targeted industry professionals and examines issues currently affecting the advertising, marketing and entertainment industries.