sham contract

A sham contract is a situation where an employment relationship is falsely presented as an independent contracting arrangement by an employer.

Sham contracting occurs when an employer disguises an employee as an independent contractor. This misrepresentation can be done to avoid responsibilities like providing employee entitlements. It involves situations where a worker is actually an employee based on their work conditions but is labeled as a contractor. This is illegal and can lead to penalties.

Blue icon lightbulb

Explore more terms

Whether you're looking for definitions of other related terms or just browsing, our full list offers a wealth of information at your fingertips.

Back to Glossary