You know you need to get a job in the trades industry, but did you know there are different types of job contracts? The type of job you take on can be the difference between getting paid to build a career in your trade, and just making some cash.

The difference between job contracts is confusing for many trainees.

“At first I didn’t really understand the differences,” says MPTT trainee Toni Rhind. “I thought if I was working in my trade, it must count towards my apprenticeship.”

But it’s not as complicated as it sounds. There are basically four types of job contracts when you’re starting out in the trades:

Read on to learn about the different types of contracts, and work out which one is right for you. And if you have questions about a job offer or contract, have a chat with your MPTT navigator.

YOUR BEST OPTION: An apprenticeship

If you want a long-lasting career in your trade, an apprenticeship is what you’re aiming for.

An apprenticeship is more than a job – you’ll be working towards your qualification. According to apprenticeship provider MITO, that means completing practical assessments at work to prove you can do certain tasks, as well as doing some off-job training in a classroom. When you’ve finished your apprenticeship, you’ll be qualified in your trade.

How do you know if you’re in an apprenticeship rather than just a job? Hayden Toomer from BCITO, which provides apprenticeships in building and construction, says an apprenticeship is a contract between three parties:

1. You, the trainee
2. Your employer
3. An apprenticeship provider, such as:

“All three parties need to agree to it,” says Hayden. “If you’re starting an apprenticeship with us, BCITO will come out and visit you. We’ll run through the full process with the trainee, show them what’s involved, get all the contracts signed and arrange the payment of annual fees. If that hasn’t happened, there’s no apprenticeship.”

According to Hayden, you’ll have the best chance of scoring an apprenticeship if:

You’re up-front about what you want. “I believe when a young person meets a prospective employer, they need to tell them, ‘Look, I just finished a pre-trades course, I’m really keen to be involved in the construction industry and I want to complete my apprenticeship to become a qualified carpenter.’ It’s about the trainee being involved in their own future and being proactive.”

You work hard. “It’s about doing yourself a favour by turning up, working hard, having a good attitude and being a team player,” says Hayden.

You know you’re an apprentice when:

• You have an agreement with both your employer and an apprenticeship provider.
• You’ve paid a fee, or your employer has paid a fee, to the apprenticeship provider.
• You’re working towards getting qualified. As you learn and practise new skills, you’ll record what you’ve done and your employer will sign off on it.
• As well as working, you might attend classes at a polytechnic, such as Unitec or Manukau Institute of Technology (MIT).

Advantages:

• You’ll be getting paid to learn.
• You’ll be working towards your qualification.
• Your employer will be actively helping you build your skills.
• Once you’re qualified, you’ll be in high demand and can earn a lot more money.

Keep in mind:

• Apprentices may get paid a bit less than labourers and hammerhands – but remember you’ll soon be earning a lot more when you’re qualified, says Hayden. “If you’re not in an apprenticeship, your pay rate may not increase over time, whereas with an apprenticeship you’ll increase the rate you’re paid as you learn more. Give up the slightly higher money now to get your apprenticeship, and once you’ve got your trade, you’ll get good money consistently.”
• If you start an apprenticeship and then get offered another apprenticeship for a bit more pay, think twice before you change employers, says Hayden. “An apprenticeship is a contract, and by changing employers you’ll break that contract. Then you’ll probably need to go through another trial period with your new employer before continuing your apprenticeship.”

A GOOD OPTION: A job that leads to an apprenticeship

When an employer takes you on as an apprentice, they’re investing time and money in training you. So before they commit to your apprenticeship, they’ll often want you to complete a trial period.

During your trial, you’ll be employed and paid by the company, but you won’t be working towards your qualification yet. After a set amount of time that you agree on with your employer (such as 90 days), you’ll start the apprenticeship.

Hayden says this is a good way to get started.

“I think the hardest thing is to get a job in the industry. Once you’ve got a job, whether or not you start your apprenticeship immediately or six months or 12 months down the track, it’s all valuable learning.”

However, make sure your employer knows you want to become an apprentice, and ask them how you can get there.

“You need to set the stage right at the start, so the employer knows they’re not just hiring a hammerhand or a labourer,” says Hayden.

You know your job is leading to an apprenticeship when:

• You’ve talked to your employer and agreed on a trial period before your apprenticeship starts. It’s a good idea to ask to get it in writing, to make sure you’re on the same page.
• The company has had apprentices before (unless it’s a small company and you’ll be their first apprentice). This shows they have a process in place for getting their workers qualified.

Advantages:

• You can make sure you like your boss and your team before you commit to an apprenticeship.
• You can start gaining on-the-job experience and getting paid immediately.
• You know what you need to do to move into an apprenticeship.

Keep in mind:

• It’s up to you to let your employer know you’d like an apprenticeship.
• There’s no perfect time to start an apprenticeship so just begin as soon as you can, says Hayden. “A lot of people procrastinate and say ‘I’ll get onto my apprenticeship later; I’m not ready to do it yet; I’m not sure if I really want to do this’. A year or two later I see them and they’re still doing the same job, and they could have been halfway through their apprenticeship.”

TRY TO AVOID: A job that just pays the bills

This is where you’re employed by a company, but there’s no plan to get you into an apprenticeship – such as being hired as a labourer or hammerhand.

While you might take one of these jobs temporarily, remember you need to work towards getting qualified if you want a career in your trade rather than just a job.

It can be tempting to get a job as a labourer or hammerhand when you’ve got bills to pay. With the current demand for workers, it’s relatively easy to find a job, and you might even get a good hourly rate.

But even though the pay seems good now, you’re unlikely to get much of a pay rise without getting qualified – and that means getting an apprenticeship.

You know your job won’t lead to an apprenticeship if:

• There’s no plan for you to have a conversation about an apprenticeship with your boss, such as after a trial period.
• You’ve talked to your employer and they said they can’t offer you an apprenticeship.

Advantages:

• You get paid for the work you do.
• You can put the job on your CV to help show your work readiness and practical skills.

Keep in mind:

• Even though you might get a higher hourly rate as a labourer than you would in an apprenticeship, getting qualified will mean you can earn much more in the future.
• To build a lasting and rewarding career in the trades you need to get qualified, which means getting an apprenticeship.
• Right now, the construction boom makes it easier for less skilled workers to get a job and a good hourly rate. But if the demand for labour drops, those who aren’t qualified yet will find it much harder to get well-paid work.

GET ADVICE IF YOU ARE: Working as a contractor

If you’re just starting out, you should get advice before taking on this option. As a contractor, you’re actually self-employed. So, even though you’re getting paid to work for a company and might even be able to get an apprenticeship (where you have a contract with both the company you work for and an apprenticeship provider), you’ll need to pay your own taxes and cover your own costs.

Running your own business is a whole other skill set, so while you’re getting qualified in your trade, having an employment contract is better than being a contractor. That way, you can focus on building your trades skills while your employer takes care of the business side of things.

As a contractor, you also won’t necessarily get the sick pay and annual leave that employees are entitled to.

Having said that, many apprentices do start out as contractors. If you’re offered an apprenticeship as a contractor, you’ll still be working towards your qualification – but you should get advice on how to manage your work and pay your taxes. As a start, talk to your MPTT navigator – they’ll be able to help you find the information you need and answer your questions.

Legally, a contractor can usually decide when they work and how they complete a job. So, if you’re a contractor but the company you work for decides the hours you work and supervises you, and you’re doing ongoing work for them (rather than a one-off project), talk to your MPTT navigator. They can give you advice on what you’re entitled to, and help you form a plan to speak with your boss about upgrading to an employment contract.

You know you’re working as a contractor if:

• The company isn’t paying tax for you. Check your pay slip – if the company is paying tax on your behalf (called PAYE or withholding tax), that information should be on your pay slip.
• If you’re sick or need a day off, you don’t get paid.
• There’s no guarantee that you’ll be doing ongoing work for the company.

Find out more about the differences between an employee and a contractor.

Advantages:

• Once you have your qualification, you might be able to charge a higher rate as a contractor and earn more than as an employee.

Keep in mind:

• Being self-employed is a big learning curve, so it’s best to get advice when you’re starting out – such as talking to your MPTT navigator.
• Being a contractor is a lot of responsibility. For example, you’ll need to work out how much tax to pay the government and make sure you pay it on time, or hire an accountant to do this for you.
• Because you’re not employed by the company, you might not get sick leave or holiday pay.

Need advice about a job contract? Get in touch with your MPTT navigator.