The legal timeline
How the risk has compounded since 2024
These aren't theoretical risks. Each development is a real ruling, a real law, or a real rate change — and they compound each other.
2024
The ruling that changed everything
Pascua v Doessel Group Pty Ltd [2024] FWC 2669
The Fair Work Commission ruled that a Filipino paralegal engaged as an "independent contractor" was in fact an employee entitled to Australian workplace protections. The Commission found that geographic distance, contractual labels, and invoice-based payments do not override the true nature of the working relationship.
2025
The Commission went further
Pascua v Doessel Group Pty Ltd [2025] FWC 1833
The same case returned — and the Commission awarded compensation for unfair dismissal. Offshore workers misclassified as contractors can now claim back wages, entitlements, and pursue unfair dismissal remedies against Australian businesses. A Full Bench appeal confirmed the Commission's jurisdiction.
1 Jan 2025
Wage theft became a criminal offence
Fair Work Amendment (Closing Loopholes) Act 2023
Intentional underpayment of a worker is no longer a civil matter alone. From 1 January 2025, it carries the risk of criminal prosecution — including substantial fines and potential imprisonment. For any business whose offshore "contractor" is later reclassified as an employee, back-wages owed beneath Australian minimum wage thresholds fall within scope of these criminal provisions.
2025–26
Super obligations increased to 12%
Superannuation Guarantee (Administration) Act 1992, s.12(3)
The superannuation guarantee rate for 2025–26 is 12% of ordinary time earnings — up from prior years. For businesses with reclassified offshore workers, this means growing back-payment liability on super in addition to wages, leave entitlements, and unfair dismissal compensation.
Self-assessment
Are you at risk?
The Fair Work Commission doesn't look at what your contract says. It looks at how the work is actually performed. If any of the following describe your offshore arrangement, you may be exposed.
The contractual label — "contractor", "freelancer", "consultant" — does not determine the outcome.
The actual nature of the working relationship does.
What exposure actually looks like
The liability is compounding every pay cycle
When a reclassification occurs, it applies retrospectively. Every pay cycle in which the worker was engaged represents potential liability across five categories.
Back wages
Any gap between what was paid and Australian minimum wage entitlements — potentially across years of engagement.
Leave entitlements
Annual leave, personal leave, and public holidays accrued but not paid across the full period of engagement.
Superannuation
12% of ordinary time earnings owed for every pay cycle the worker was engaged as a reclassified employee.
Unfair dismissal compensation
If the engagement was ended, the worker may also pursue unfair dismissal remedies — now established as available to offshore workers.
Criminal exposure
Intentional underpayment now carries the risk of criminal prosecution under the Closing Loopholes Act — fines and potential imprisonment.
"When the original Pascua ruling came down in 2024, a lot of business owners shrugged it off as an edge case. It wasn't." The follow-up compensation award in 2025, combined with criminal wage theft laws and a 12% super rate, means the liability sitting on the books of businesses doing this direct is now compounding every single pay cycle.
— Julius Schoenfeld, Co-Founder, Team Up Now
The solution
An Employer of Record structure resolves the exposure entirely
Under an EOR model, a Philippine-registered entity becomes the legal employer of the offshore worker. The Australian employment relationship — and all of the obligations that come with it — simply doesn't arise.
A Philippine-registered entity becomes the legal employer
The offshore worker is employed by a locally registered entity in the Philippines — not your Australian business. The Australian employment relationship, and all obligations under it, simply doesn't arise.
Full Philippine labour law compliance is handled
SSS, PhilHealth, Pag-IBIG, 13th month pay, tax, and all statutory benefits are managed by the EOR entity. Your team member is employed correctly under Philippine law.
You retain full operational control
You direct the work, set the hours, manage performance, and run the relationship exactly as before. The EOR structure changes the legal layer — not your day-to-day working relationship.
Still 50–70% cheaper than an Australian hire
A properly structured EOR arrangement doesn't eliminate the cost advantage of offshore staffing. It removes the legal exposure that was sitting underneath it.
How Team Up Now works
Recruitment and compliance in one service
Most businesses have to source a staffing agency separately from an EOR provider. Team Up Now does both — removing the coordination overhead and ensuring the compliance structure is built in from day one.
End-to-end recruitment
Role scoping, candidate search, multi-stage vetting, skills assessment, and structured shortlisting — across any function in your business.
EOR employment structure included
Your team member is employed by our Philippine-registered entity from day one. SSS, PhilHealth, Pag-IBIG, 13th month pay, tax, and payroll are handled entirely on your behalf.
Australia's first lifetime replacement guarantee
If your team member ever leaves — for any reason, at any point — we replace them at no additional placement cost. Billing is paused during the gap. No time limits. No small print.
Placement fee
$2,000
AUD · one-time per hire
EOR fee
$300
AUD · per month per team member
Versus equivalent AU hire
50–70%
cheaper, fully compliant
Common questions
Does the label on the contract matter?
No. The Fair Work Commission's 2024 ruling confirmed that geographic distance, contractual labels, and invoice-based arrangements do not override the true nature of the working relationship. The Commission looks at how the work is actually performed — not what the contract says.
I've been doing this for years — am I retrospectively exposed?
Yes. The wage theft provisions and the reclassification risk apply to the history of the engagement, not just from today forward. Every pay cycle in which a reclassified employee was underpaid represents potential liability.
What if the worker is based in a country other than the Philippines?
The Pascua rulings have the greatest direct relevance to Filipino workers, but the underlying principle — that the Fair Work Commission can examine the true nature of the working relationship regardless of geography — is broader. Legal advice specific to your situation is recommended.
Is an EOR expensive?
Team Up Now's EOR fee is AUD $300 per month per team member. Relative to the liability exposure being resolved — back wages, super, leave, unfair dismissal, and criminal risk — it's a straightforward cost-benefit calculation.
Can I still manage and direct the worker's day-to-day work under an EOR?
Yes. The EOR structure changes the legal employment relationship — not your operational control. You direct the work, set priorities, and manage performance exactly as before.
Get your offshore arrangement reviewed
Book a free 30-minute call. We'll walk through your current arrangement, explain exactly what's changed, and show you what a compliant structure looks like for your business.
No commitment required · South Melbourne, VIC · Filipino talent specialists