5 Things US Tech Companies Get Wrong When Hiring in Australia

By Laura Chuck, Founder of LSQUARED

I've spent over 20 years working in People and Culture at US tech companies (Lyft, Zynga, Twitch) and scaling into Australia and New Zealand at TikTok. I've watched brilliant US operators make the same expensive, avoidable mistakes every time they hire their first Australian employees.

Australia looks familiar enough that most US founders assume the rules are basically the same as home. They're not. The employment framework here is fundamentally different, and the cost of getting it wrong legally, financially, and culturally can be significant.

Here are the five mistakes I see most often, and what to do instead.

1. Assuming Employment Works Like the US (It Doesn't)

The biggest mindset shift US founders need to make: Australia has no at-will employment.

In the US, you can generally let someone go at any time, for any reason, with minimal process. In Australia, once an employee passes their minimum employment period (typically six months, or 12 months in a small business), they are protected from unfair dismissal under the Fair Work Act. That means you need a valid reason to terminate, and you need to follow a fair process to get their warnings, performance improvement plans, and the opportunity to respond.

Get this wrong and you're looking at an unfair dismissal claim at the Fair Work Commission. Most of these settle. Even weak claims are expensive to defend and time-consuming to manage. I've seen US companies pay out three to six months of salary to resolve claims that could have been avoided with a proper process from the start.

What to do: Treat your employment relationships as long-term from day one. Build proper performance management processes. Document issues when they arise. Don't wait until you want to exit someone to work out how to do it.

2. Getting Superannuation Wrong

Superannuation Australia's mandatory retirement savings system catches almost every US company off guard, because it works differently from anything in the US.

Here's what you need to know: on top of whatever salary you agree with an employee, you are legally required to pay an additional contribution into their superannuation fund. As of 2024, that rate is 11.5%, rising to 12% from 1 July 2025. This is not optional, it is not negotiable, and critically, it is on top of the agreed salary, not included in it, unless your employment contract explicitly states the salary is "inclusive of superannuation."

US companies routinely make one of two errors: they either forget about super entirely (expensive catch-up payments, penalties, and interest) or they assume salary packages work the same as US total compensation structures (they don't, without very specific drafting).

Super must be paid quarterly at minimum into a complying superannuation fund. Employees can generally choose their own fund.

What to do: Make sure your employment contracts clearly state whether salaries are inclusive or exclusive of superannuation. Budget for super as a true additional cost on top of salary. Get local legal or HR advice before you make your first offer.

3. Misclassifying Contractors

"We'll just bring them on as a contractor" is one of the most common things I hear from US founders setting up in Australia. And I understand the appeal of less obligation, more flexibility. The problem is that Australian law takes contractor misclassification very seriously.

The Fair Work Act and related legislation look at the substance of the working relationship, not just what you call it. If your "contractor" works exclusively for you, works set hours, uses your equipment, and has no real independence, there's a strong chance they're actually an employee in the eyes of the law. The consequences of back-payment of entitlements including annual leave and superannuation, penalties, and reputational damage can be severe.

Australia also has specific rules around "sham contracting," where an employer deliberately misrepresents an employment relationship as a contracting one. This carries significant financial penalties.

What to do: Be honest about what the working relationship actually is. If someone is embedded in your team, works your hours, and doesn't have a real independent business, treat them as an employee. Get advice on structuring contractor arrangements properly if genuine independent contracting is what you need.

4. Underestimating Statutory Leave Entitlements

Australian employees are entitled to significantly more by law than most US employees receive even as a generous benefit. This isn't discretionary these are minimum legal entitlements under the National Employment Standards (NES):

• 4 weeks of paid annual leave per year (some shift workers get five)

• 10 days of paid personal/carer's leave (sick leave and carer's leave combined)

• Compassionate leave for family bereavement

• Parental leave — up to 12 months unpaid, with the right to request a further 12 months

• Long service leave — after a set period of continuous service (typically seven to ten years depending on the state), employees accrue additional paid leave

US companies often build leave policies based on their US frameworks two weeks PTO, maybe three and assume those can be applied in Australia. They can't. Australian minimums must be met regardless of what your global policy says.

What to do: Build your Australian leave policy from the NES minimums up, not from your US policy down. Factor leave entitlements into your financial modeling when planning headcount especially annual leave, which accrues as a liability on your balance sheet.

5. Ignoring Modern Awards

This one surprises almost every US founder I work with. In Australia, most employees are covered by an industry or occupation-specific document called a Modern Award. There are more than 120 of them, covering everything from the Tech Sector Award to the Professional Employees Award.

Modern Awards set legally enforceable minimum conditions on top of the NES: minimum pay rates by classification, overtime rules, penalty rates for weekend or evening work, allowances, and more. If your employment contracts or practices fall below what the applicable Award requires, you're non-compliant even if your employees signed contracts agreeing to those terms.

US tech companies often assume they can simply pay above-market salaries and that covers everything. Sometimes it does (a salary high enough above Award minimums can be structured to absorb Award entitlements through an "all-in" arrangement). But it needs to be done deliberately and correctly.

What to do: Identify which Award or Awards apply to your Australian employees. Either ensure your employment contracts meet or exceed Award conditions, or structure an above-Award salary with appropriate "absorption" clauses drafted by a local employment lawyer.

The Bottom Line

Australia is one of the best markets in the world for US tech companies to expand into — strong talent, English language, overlapping culture, and a time zone that serves APAC. But the employment framework is not a lighter version of the US system. It has its own logic, and it protects employees meaningfully.

The companies that get it right from the start invest in proper advice before they make their first hire, not after their first HR crisis.

If you're a US-based company building a team in Australia and want to get the foundations right, I'd love to talk.

Laura Chuck is the Founder of LSQUARED, a strategic People and Culture consultancy based in Sydney. She has led HR and People functions at TikTok, Amazon's Twitch, Lyft, Zynga, and Ancestry, across North America, Europe, and ANZ.