When does a casual employee have to become permanent?
You should regularly review casual staff contracts in case they are eligible to become permanent staff (with leave entitlements) or entitled to sick leave accruals.
Here is a quick guide to what it means to be casual and when a casual employee should be considered permanent and enter into a new contract.
What is a casual employee?
- an employee who is called in occasionally to work
- contract is for less than 12 months
- employment is so intermittent that a regular working pattern cannot be determined
How much should casual staff be paid?
- they receive an 8% loading on their taxable earnings to compensate for lack of other leave entitlements (in actual fact the loading is a termination payment as casual staff are employed one pay period at a time)
- the pay rate can be inclusive (however it must be at least minimum hourly wage + 8%)
- payslips should clearly show the holiday pay (casual loading) component
When does a casual employee become entitled to sick leave?
- A casual employee is entitled to accrue 5 days sick leave if they work at least 10 hours per week for a period of 6 months (there are additional criteria)
- you should reconsider their employment status if they are accruing sick leave
Are casual staff entitled to be paid for Public Holidays?
- If they would normally have worked that day, then YES
When should a casual employee change to a permanent contract?
- when directed by a Labour Inspector (NOTE: if you have been employing a casual for more than 12 months you *may* be liable for public holidays as well as annual leave entitlements if they are deemed to be permanent)
- if the contract exceeds 12 months and the employee is working a regular work pattern (similar hours each pay period)
- generally, if the employee is entitled to sick leave
Should I create a new employee record when employment status changes?
- SmoothPay will do this automatically, as their average daily pay, average weekly earnings, anniversary etc start from their new contract date