New casual overtime rates to cause confusion among employers

Published November 11, 2020 (last updated January 25, 2022) -
Casual Overtime

Employers across multiple awards will soon be financially affected by a new decision regarding how overtime is calculated for casual employees.

From November 20, rates for casuals will either increase, decrease or not change following clarification from the Fair Work Commission on how overtime is calculated.

“This couldn’t have come at a worse time for business owners, who were hoping to take on more casuals ahead of the busy Christmas period,” said Ed Mallett, Managing Director of Employsure, Australia’s largest workplace relations advisor.

Employers have had to adapt to a number of industrial relations changes this year as a result of the pandemic. 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.”

Each award affected will have one of three methods applied in calculating overtime. Employers will 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.

“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,” continued Mr Mallett.

“The FWC needs to step back and look at this pragmatically. 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.

“Planning ahead of the busy Christmas period is key. This change is a double hit to employers who would have already planned ahead accordingly how many casuals they were hoping to employ. Now they will need to rethink or risk paying extra wages.

“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 concluded.

Further enquiries:

Matthew Bridges

[email protected]

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