NEWSFLASH: Casual Employee - Legal Changes
Confused about being or hiring casual employees?
YOU asked and WE listened
What Changes?
The main body in Australia that deals with all things employee and employer rights and obligations related: The Fair Work Commission have updated the casual and overtime in most awards. If you’re a casual in Australia - you’re likely impacted.
When do they come into effect?
Most of these updates start from the first full pay period on or after the 20th November 2020. The Aged Care Award change comes into effect 1st March 2021.
What constitutes a Casual Employee?
Someone who doesn’t really get a firm commitment (a promise of sorts) in advance, of when their company needs them to work (days or hours). This is often denoted by someone who works to a staff roster that can and often does change.
Generally speaking, a casual:
- Doesn’t get paid sick or annual leave (additional pay often reflects this)
- Usually works irregular hours
- Has no guaranteed hours of work
- Can end employment without notice, unless explicitly required by a registered agreement, award or employment contract.
Key Changes?
Ordinary time (base rate) is calculated at 100%, casual loading at 25% and overtime is calculated at 150%
There are now 3 ways to calculate overtime and it will depend on the Award.
Check https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/updates-to-casual-and-overtime-clauses-in-most-awards for specifics
These methods are as follows:
- The Cumulative Method
Where both overtime and casual loading are applied to the ordinary time base rate.
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- An example would be: base rate x overtime penalty and casual loading - 100% x 175%
- The Substitution Method
Overtime is calculated on the base rate AND excludes the casual loading.
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- An example would be: base rate x overtime penalty - 100% x 150%
- The Compounding Method
Overtime is calculated on the casual loaded rate of pay.
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- An example would be: casual loaded rate x overtime penalty penalty - 125% x 150%
This has been a common question asked of late, so we’re hopeful this brief resource proves useful. We would add that the Fair Work folks over at www.fairwork.gov.au have done a great job of breaking down the specifics as they apply to each individual award.
So - if you’re feeling a little lost, worry not - they’ve consulted a fair few confused employees and established some great additional Q&A’s just for you!
If you’d like additional help in the creation of a great communication strategy that best explains these changes and what it means for you or your people, reach out to us at: https://louisewithemployease.com/contact/ for help from our team.