From 20 November, rates for casuals will either increase, decrease or not change following clarification from the Fair Work Commission on how overtime is calculated.
In October 2020, the FWC issued its determinations for the variation of 96 modern awards to resolve ambiguities around casual employee entitlements to overtime loadings.
Following this decision, as of 20 November 2020, overtime for casual employees under these 96 modern awards will need to be calculated either: in substitution for casual loading; in addition to casual loading (cumulative approach); or in addition to the sum of an employee’s minimum hourly rate plus casual loading (compounding approach).
But given that many businesses are hoping to take on more casuals ahead of the busy Christmas period, Employsure managing director Ed Mallett warned that “this couldn’t have come at a worse time”.
“Employers have had to adapt to a number of industrial relations changes this year as a result of the pandemic,” Mr Mallett said.
“Introducing these new casual rates at an extremely busy time simply isn’t practical. Some employers may not be aware of the changes and could run the risk of underpaying their employees.”
Mr Mallett is particularly concerned for small businesses following an extremely tough year.
“This is a ridiculous outcome for small-business owners who are working their hardest to recover from the restrictions and lockdowns that have essentially buried them in the ground this year,” he said.
Moreover, he explained that employers could easily find themselves with underpayment accusations if they don’t pay for the minimum engagement, the right award, or are unaware of the increased rates altogether.
“The new rates come at a time when many employers that have been surviving week to week on the JobKeeper wage subsidy are now either on the new reduced rate, or are no longer eligible,” he continued.
“These complicated changes to the casual overtime rate are virtually impossible for the average small-business owner to understand, and we will see honest SMEs accused of wage theft as a result of this.”
He urged the FWC to step back and look at the issue pragmatically.
Mr Mallett concluded: “This will have a big impact on the number of hours that will be available to casuals over Christmas. Many employers who were hoping to take on extra casuals over the period simply won’t be able to now.
“This will result in them being stretched to breaking point at one of the tightest times of the year.”