Your business is growing and you’re busier than ever, so it’s time to step out and hire your first proper employee. Before you start placing ‘help wanted’ ads, it’s important to be up-to-date on the employee rights mandated by law in Australia. This will protect both you and your new staff member.
This handy checklist is made for employers hiring for the first time.
By educating yourself now, you can have a productive and happy working environment for years to come.
What are the National Employment Standards?
The National Employment Standards (NES) is a law that ensures employers offer 10 entitlements to all employees:
- A maximum of 38 hours work hours per week for full-time employees
- Reasonable requests for flexible work arrangements
- Parental leave entitlements of up to 12 months unpaid leave (with the option of another 12 months unpaid leave)
- Annual leave of 4 weeks paid leave per year
- Domestic carers’ leave of 10 days paid and two days unpaid; compassionate leave of two days; domestic violence leave of five days unpaid (within a 12-month period )
- Community service leave for jury duty and the like
- Long service leave for casual, contract, full- and part-time employees who have worked for the same company for many years
- Paid public holiday leaves
- Notice of termination and redundancy of up to five weeks, with up to 16 weeks’ redundancy payout
- Provision of a Fair Work statement to all employees
On top of these 10 entitlements, it’s common practice to create tailored contracts for individuals. You’ll want to follow the industry or national awards for wages and conditions and other legal agreements in setting rules about how employees go about taking leave and what notice periods are required.
What are the different types of workers?
Now you’re aware of what the NES requirements are, it’s time to think about what kind of employee will work best for your business.
No doubt you’ve heard about full-time, part-time, casual and shift workers. Employee rights vary from category to category, so let’s look at the differences.
A full-time employee is someone who has a permanent work agreement in place and a guarantee of a maximum of 38 hours work per week. They’re entitled to be paid for:
- Personal leave
- Four weeks’ annual leave
- Public holidays
They’re also entitled to be paid for overtime if you require them to work over the maximum hours per week. Full-time employees also have rights to work breaks and must be paid at least monthly.
Needless to say ‘favours or in-kind support’ are not a form of payment in Australia.
A part-time employee is someone who usually works less than 38 hours a week (often the same number of hours per week).
They’re either permanent employees or work on a fixed-term contract.
Part-time employees are entitled to the same rights and benefits as full-time employees but on a prorated basis, according to the number of hours they work.
A casual employee is someone who isn’t given a minimum number of hours of work on a regular basis. They differ from part-time employees, as they have no guarantee of work and are not entitled to paid leave on public holidays.
However these kinds of employees are entitled to:
- A flexible schedule
- The minimum hourly rate for Australia
- 25% loading on their base rate to make up for the fact they don’t get sick leave and other entitlements
Casual employees usually work to a roster that changes and can refuse shifts given to them.
As the employer, you’re required to pay quarterly superannuation contributions of 9.5% if your employee is over 18 years and earning over $450 monthly before tax (or is under 18 and works over 30 hours a week). These expectations also relate to workers on temporary visas.
A shift worker is someone who works shifts that start at or after 6 p.m. and end no later than 5 a.m. the next day. They get an extra payment for working outside the regular labour force hours of 7 a.m. to 7 p.m. Their shifts can’t be changed to avoid paying public holiday entitlements.
What is a probation period?
Many employers opt for a probation period to see if a new employee is a good fit for the company. You the employer define the length of probation periods, from a few weeks to a few months.
During the probation period, your employee must receive all the same entitlements as someone who is not on probation. And, they must be given the same notice of termination period if you find them unsuitable for further work in your company.
Can I just get an unpaid intern to help me out for a while?
Depending on your arrangement, you could be breaking the law if you hire an employee and don’t pay them a fair wage and meet the employment conditions.
The test of whether an intern is legally an employee (and therefore should be paid) comes down to whether there is an employment relationship in place.
It considers factors such as whether the business is benefitting from the work undertaken, the intention behind the work (to work or to learn) and the level and nature of the work being performed.
One option to consider if your budget doesn’t stretch to hiring a staff member is to contact your local TAFE and see if you are eligible to offer vocational work placements. Many students go on to be employed by their training workplaces, as they get a chance to prove their skills while they’re studying.
What are my responsibilities as an employer?
As well as making sure you pay your employees fairly, you also need to make sure you’re legally covered. This includes making sure you:
- Have personal and workers insurance
- Are providing a safe and compliant workplace
- Are meeting the taxation and superannuation requirements
For employees who are not citizens or permanent residents, you must also ensure they have all relevant working rights.
Know Australia’s employee rights
Understanding Australia’s employee rights before hiring your first staff member is key to keeping your business in good standing. Use this guide to decide what kind of employee will best suit your business. It will help you avoid any (costly) legal mistakes so you can focus on serving your customers and doing what you do best.
Details accurate at the time of publication. Check the National Employment Standards website for updates.