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Part time or casual? A word of caution…

By SmartPayroll | August 23, 2013

Employing a casual worker can come with some issues. When paying casual worker wages including 8% as holiday pay, there are circumstances that can mean they are still entitled to 4 weeks of paid leave as well.

Avoid problems with annual leave pay

A casual employee working every week for over a year may actually be working under the conditions of a part-time employee who is technically considered permanent. They are therefore entitled to their 4 weeks of leave. You may have paid the employee their 8% all year, but may still end up paying them for 4 weeks holidays on top of this as well if they challenge their terms of employment.

The best thing to do is err on the side of caution; if there’s any doubt about how long they will be working for and whether it will be regular weekly work, make them part time.

Being clear on the payslip

When you provide the payslip to your casual employee (which we strongly recommend you do every payroll), make sure you have clearly shown the 8% holiday pay. This way, the employee knows the status of their employment with you and can query it with you if need be. It’s important casual workers understand what casual work entails.

If you want to know more about casual employees, check out this article by FindLaw, where distinction between permanent and casual is provided, as well as details around employment agreements.

The Department of Labour also have a great resource on holidays and leave which we urge all employers to familiarise themselves with.

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Are you having issues trying to ensure you’re paying a casual worker correctly? Get in touch and we can offer expert advice on processing payroll correctly. We’re reachable on Twitter and our website – or just give us a call on 0800 10 10 38.