Most business owners know all too well about casual loading – the extra pay rate on top of the normal hourly rate that casuals get. The Fair Work Commission has recently made a decision affecting casual overtime for multiple awards. To be more specific, they’re setting out how to calculate a casual’s overtime payment.
As with most things to do with the Australian workplace relations system, how casuals receive overtime is complicated and requires explaining. Luckily for you, this blog is here to show you the way.
How to Calculate Overtime for Casuals
The FWC has indicated that each award in review (list below) will have one of three methods applied in calculating overtime for casuals:
Method 1 | Method 2 | Method 3 |
The overtime (OT) entitlement is calculated on the permanent base rate (BR) and it excludes the casual loading (CL) | The overtime entitlement and the casual loading are applied to the permanent base rate | The overtime entitlement is calculated on the casual loaded rate of pay |
BR x OT | BR x (OT + CL) | (BR + CL) x OT |
E.g. 100% x 150% | E.g. 100% x (150% + 25%) | E.g. (100% +25%) x 150% |
That’s right – different Awards will have different methods of calculating a casual’s overtime. That means your business, if more than one Award applies to you, may have to calculate overtime for casuals using more than one method!
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What Awards Are Affected?
For some Awards the FWC have reached an agreement with industry groups on how they will pay their casuals, while others are still contested. Awards have either had their overtime rates increased or decreased. Check below to see if your Award has been affected.
Awards That Have Received an Increase
Black Coal Mining Industry Award
Broadcasting, Recorded Entertainment and Cinemas Award
Business Equipment Award
Concrete Products Award
Contract Call Centres Award
Electrical, Electronic and Communications Contracting Award
Health Professionals and Support Services Award
Labour Market Assistance Industry Award
Marine Tourism and Charter Vessels Award
Marine Towage Award
Ports, Harbours and Enclosed Water Vessels Award
Stevedoring Industry Award
Sugar Industry Award
Surveying Award
Telecommunications Services Award
Transport (Cash in Transit) Award
Awards That Have Received a Decrease
Aluminium Industry Award
Ambulance and Patient Transport Industry Award
Amusement, Events and Recreation Award
Local Government Industry Award
Passenger Vehicle Transportation Award
Salt Industry Award
Supported Employment Services Award
Travelling Shows Award
Water Industry Award
What is Casual Loading?
Casual loading is additional payment made on top of a casual employee’s fixed hourly wage. The percentile rate of casual loading is determined by the relevant award or agreement covering that specific job. Casual loading is usually 25%, but the rate depends on the applicable Award.
What is Overtime?
Overtime is work performed outside the ordinary hours listed in an award, agreement or as specified in the contract of employment.
Under most Awards, overtime is defined as work performed beyond the maximum number of daily and/or weekly hours, outside the span of ordinary hours (ie. 7.00am – 7.00pm), or outside the agreed number of hours in the employment agreement.
How Can I Get Help?
Peninsula can assist you understand this change, how to calculate overtime for your casuals, and better understand the rights and entitlements of your casual employees. Not a client? Call us now for free, initial advice on 1300 651 415.
Download our Casual Overtime Factsheet
The factsheet below has all the information you need to better understand this change.
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Call our team to receive free initial advice on casual overtime or any other workplace relations topic.