With the rise of insecure work arrangements and the gig economy it’s becoming more and more important for employers and employees to understand where they stand when it comes to casual work. One in four Aussie employees is a casual worker however, there is still a range of myths and misconceptions that can confuse the process for everyone involved.
Casual employees can often be the most cost-effective way of hiring for your business, particularly if you’re looking to fill seasonal shifts. However, hiring casuals does come with its own set of challenges – you run the risk of workers looking for more permanent work elsewhere, unavailability’s and a lack of engagement with the company culture.
Here are five tips for navigating the minefield that is casual employment:
- Know your definitions
It’s important to know the distinctions between different types of temporary workers such as contractors, casuals and consultants.
According to the Fair Work Ombudsman a casual employee:
– Has no guaranteed hours of work
– Usually works irregular hours (but can work regular hours)
– Doesn’t get paid sick or annual leave
– Can end employment without notice, unless notice is required by a registered agreement award or contract
Casual workers are entitled to:
– A higher hourly pay rate than equivalent full-time or part-time employees (‘casual loading’)
– Two days unpaid carer’s leave and two days unpaid compassionate leave per occasion
– Unpaid community service leave
- Ensure you are paying correctly
To offset the fact that casual employees don’t have the same entitlements as part or full-time employees, they are entitled to a higher hourly pay rate or ‘casual loading.’
Australian minimum wage awards specify a casual loading of 25% however, in enterprise agreements the casual loading varies by sector- usually between 15%- 25%.
On top of this, there are a variety of different ways to calculate this pay rate (for example, some awards incorporate public holiday penalty rates while others don’t) so it’s important to be familiar with the agreement or award that is relevant to your industry and ensure workers are being paid fairly.
- Understand casual conversion
It’s possible for a casual employee to change to full-time or part-time employment at any time if the employer and employee both agree to it.
The process of casual conversion differs according to the enterprise agreement or award that covers a particular industry but it’s important to be aware of what obligations you have as an employer as well as the rights of the casual employee.
A decision last year delivered by the Fair Work Commission held that, subject to certain restrictions, modern awards should be varied to enable casual employees to request to convert to full-time or part-time employment after 12 months.
While there are conditions surrounding this, it’s important to be aware of clauses like these and how they will apply to your business specifically.
- Don’t assume casuals miss out on all entitlements
While casual loading exists to offset the lack of entitlements casual employees have, it’s important to remember that casual employees are entitled to some forms of leave.
While casual employees aren’t entitled to paid sick leave and annual leave like part-time and full-time workers, they are entitled to some types of unpaid leave like carer’s, compassionate and (in some cases) parental leave.
- Look at Fair Work protocols
Often it can become confusing when trying to juggle the requirements of both casual and part/full-time staff. Familiarising yourself with the award or enterprise your business is covered under is the first step in ensuring you follow the correct policies and procedures.
When in doubt the Fair Work site is a valuable tool to check things like awards, enterprise agreements, pay calculators and entitlements.
Applying awards incorrectly or failing to follow hiring or dismissal procedures correctly can mean big costs to your business so it’s important to get it right from the start.