Casual Loading Offset
New Fair Work Regulation
From 18th December 2018, employees incorrectly classified as a casual maybe be entitled to an offset payment against NES entitlements, of the annual leave the casual should have received.
As stated by Fair Work, the new regulation applies where all the following criteria are met:
An employee is employed by their employer on a casual basis;
The employee is paid a casual loading that is clearly identifiable as being an amount paid to compensate the person in lieu of entitlements that casual employees are not entitled to under the NES, such as personal or annual leave;
Despite being classified as a casual, the employee was in fact a full-time or part-time employee for some or all their employment for the purposes of NES; and
The employee has made a claim to be paid for one or more of the NES entitlements (that casual employees do not have) that they didn’t receive for all or some of the time that they were incorrectly classified as a casual.
The new regulation applies to employment periods that occurred before, or that occurred on or after, 18th December 2018.
Background of the New Fair Work Regulation
The casual loading offset is a result of a case between Workpac v Skene, where Skene was incorrectly classified as a casual yet worked regular and systematic hours with a 12 month roster set in advance. The court ruled that the employee was a permanent employee and ordered backpay of the annual leave.
What you Need to do
Unless the casual employee has made a claim to the Fair Work Commission, there is no requirement to calculate a casual loading offset against NES entitlements due to the casual.
However, you can ensure the following are implemented:
Employee payslips show the casual loading separately to ensure the employee is aware they are a casual and paid the casual loading.
Ensure the casual employee is aware the casual loading compensates their relevant NES entitlements. The wording in the casual’s contract should be tailored to meet the wording of the new Fair Work regulation.