How to employ casual workers
For many small business owners, hiring casual workers is ideal – especially if paying regular salaries isn’t in the budget and/or the workload is variable.
However, you need to be aware of the rules when it comes to paying your casual workers.
These guidelines can help you understand what you need to do when employing casual staff.
What defines casual employment?
Casual workers are employed in the most flexible of arrangements. With no commitment of regular guaranteed hours, they may work strictly on-call and are free to accept, refuse, or swap a shift when it is offered.
There are a number of drawbacks to casual employment. Casual workers aren’t entitled to the same paid benefits as regular employees, such as annual leave, or sick time. They also lack the day-to-day predictability of a regular work schedule and guaranteed earnings.
To their benefit, casual workers do not need to give formal notice to end their employment.
Casual workers are different to part-time workers. Part-time employees work regular hours each week and are entitled to paid sick leave and annual leave.
For workers who are unable or unwilling to commit to regular employment, casual work can be the perfect fit. It can also work out great for small business owners whose budget may only afford help at busy times of year or on a project-to-project basis.
Pay entitlements for casual workers
Casual employees are entitled to a higher hourly rate than you’d pay your part-time or full-time employees for the same work. Casual employees receive a “casual loading” in lieu of paid sick time or holiday pay. At minimum wage level, casual workers receive one-third additional pay.
As a starting point for determining your legal requirements when hiring casual staff, check the Fair Work Ombudsman website. You should also research the minimum wage rates under your industry award when deciding on an hourly rate for casual workers.
Other legal obligations as an employer
Hiring a casual worker doesn’t mean you can be “casual” about how you manage your flexible employees. Casual employees must be treated to the same standard as any other employee when it comes to training, outlining duties, and communicating expectations. And you must act in accordance with employee rights and employer obligations at all times.
Be sure to talk to your accountant about your legal requirement to withhold tax for casual employees. You will also be required to pay superannuation for workers whom you pay more than $450 in a month.
Casual employment is designed for workers who work irregular shifts and on an ad-hoc basis. It is not intended for employing long-term staff without having to provide paid leave or termination payments.
After 12 months of regular employment on a casual basis, a casual employee earns certain entitlements. They can request flexible working arrangements and may take parental leave. Most awards have a process whereby long-term casual employees are entitled to ask to change to full-time or part-time employment.
Casual employees often feel more vulnerable than other employees hired by the same business. Because of their flexible work arrangements, they may feel their job is insecure and that they lack status among regular salaried employees – so they may not want to “rock the boat” by asserting their rights.
Whether you decide to hire casual staff for seasonal work, to finish a project, or fill your occasional staffing needs, find out what your obligations are so you stay on the right side of the law – and treat all of your employees with the same respect and fairness.