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A guide to employing casual workers

Published on November 8, 2024

The phrase "casual job" refers to a variety of employment circumstances where the labour is not permanent (i.e. not ongoing). The main characteristic of casual work is that there is no guarantee of continued employment or of the days, hours, or shifts an employee will work.

In Australia, this type of work agreement has become increasingly common. Casual employment can be helpful for those who need to work around other commitments, or for people looking for short-term, temporary employment.

This guide will discuss your obligations when employing a casual worker to give you a better understanding of this employment arrangement. It will also explore these topics:

What is a casual worker?
What does ‘No Firm Advance Commitment’ mean?
How many hours does a casual work?
When does a casual employee stop being casual?
What are the rights of casual employees?
Security vs. flexibility for casual employees
Managing payroll with QuickBooks accounting software

What Is A Casual Employee?

Suppose a person accepts a job offer from an employer, knowing there is no guarantee of continued work with a set shift pattern. In this case, the law considers that person a casual employee.

In August 2024, the Fair Work Act 2009 was amended to include a new definition of “casual employee”. Under this new definition, an employee is considered “casual” if:

There is no firm advance commitment to ongoing work, taking into account a number of factors, including the real substance and true nature of the employment relationship; and
The employee is entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract.

An employee who starts as a casual will remain so unless their employment status is changed through a Fair Work Commission order, conversion process, or by accepting an alternative employment offer.

You can find more details about the recent casual employment changes on the Fair Work website. This is also a good resource if you’re seeking formal answers to questions such as ‘What is a casual job?’ and ’How many hours is a casual job?’

Unpacking the ‘No Firm Advance Commitment’

The term ‘No Firm Advance Commitment’ is used in casual employment agreements where there is no guarantee of regular, ongoing work.

Four factors determine whether an employer’s offer includes a No Firm Advance Commitment:

The employer and employee both have a choice whether to offer and turn down shifts respectively
The employer offers an employee work only when the business is in need
The employee is specifically described as ‘casual’
The employer pays the employee a higher pay rate for being a casual employee, or a specific pay rate usually designated to casual employees

How Many Hours Does a Casual Employee Work?

Casual employees in Australia typically do not have set hours, as their work is based on demand rather than a fixed schedule. Unlike full-time or part-time employees, who usually have a predictable number of hours each week, casual employees’ hours can vary significantly depending on the availability of work.

Hence, there’s no definitive answer to the question ‘How many hours is casual work?’ While some casual employees may work nearly full-time hours, others may only work a few hours a week.

When Does a Casual Employee Stop Being Casual?

A casual employee will remain casual unless the employer takes specific actions to alter the work circumstances. Either the employer terminates employment with the employee, or the employee becomes a permanent employee through a part-time or full-time job offer.

A casual employee may become permanent if the employer and the employee acknowledge the employee has worked shifts on a regular and systematic basis for at least 26 weeks. Both parties agree to a change in categorisation to part-time or full-time. This transition is called ‘casual conversion’.

Every new casual employee must receive a Casual Employment Information Statement (CEIS) from their employer prior to or as soon as practicable after beginning their new position. This document outlines information and details related to their conditions of employment.

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What Are The Rights Of Casual Employees?

So, what is a casual staff member entitled to, in terms of pay and leave? Here, we’ll discuss Australia’s workplace rules and explain the rights of casual employees.

Casual Loading

Casual pay rates are often higher than those on part-time or full-time contracts. The higher rate is to compensate for the lack of other entitlements usually included in employment contracts, such as paid holidays and sick leave.

Essentially, the higher rate compensates for the uncertainty of having an unreliable income week to week and month to month. Many modern awards specify a minimum casual loading of 25 per cent above the standard rate, but this may vary depending on employee circumstances.

Minimum Requirements of the Workplace

All employers in the national workplace system are subject to the minimum requirements set forth in the National Employment Standards (NES). Therefore, the NES cover all workers, including casual employees:

For each occasion that such leave is required, employees may take two days of unpaid caretaker's leave and two days of unpaid compassionate leave
Employees work a maximum of 38 hours per week, plus any ‘reasonable’ additional hours
Casual employees can take community service leave for things like voluntary emergency service or jury duty
Casual employees can take a day off on a public holiday unless the employer ‘reasonably’ requests the employee to work

As part of entering into an employment arrangement, the employer must provide a casual employee with their Fair Work Information Statement which outlines details about their employee rights in line with the NES.

Security vs Flexibility for Casual Employees

Compared to other types of employment, casual labour offers more flexible working hours. The job's permanence, though, is less guaranteed.

Not all casual employees have the option to set their own hours. An employer would likely give hours depending on their busiest times. If you call in an employee to work, you must pay them at least two hours minimum, even if they end up working less.

Casual workers have the option to decline a shift, but if they do so too frequently, the employer may stop offering shifts to them in the future. This is where some workers may experience stress due to the uncertain nature of the work.

If you are employing a casual worker, you should attempt to treat them fairly, and understand the delicate balance between flexibility and security.

Don't simply prevent casual employees from changing shifts and avoid repeatedly taking shifts away from somebody. Even though flexibility is a benefit to all parties, you need to offer flexibility that’s rooted in a sense of stability.

Additional Pay

Casual workers have the same rights to overtime pay that full-time and part-time workers do whether they put in extra time, work on the weekend, or on public holidays. A casual employee may be paid overtime rates or penalty rates depending on when they work.

Depending on the award or agreement, different overtime rates and penalties for casual employees will apply. For instance, if they work on a public holiday, some employees may be entitled to a total payment of 250% of their hourly rate, including casual loading.

Payroll Software from QuickBooks

For every employer, processing payroll can be a challenging undertaking.

However, knowing the details of each payroll component will help you understand the financial situation of your business. Additionally, it can confirm that you continue to comply with all relevant laws.

Throwing casual employees into the mix can seem intimidating as you need to navigate fair payment that may vary from week to week and month to month.

Thankfully, with QuickBooks Payroll powered by Employment Hero, we can take care of the whole process for you automatically.

No matter the complexity of your payment processes, we ensure compliance and empower employees so that everything goes smoothly. With sophisticated breakdowns and reporting, you can relax as we do the maths and make those reports easily accessible to employees, too.

See how QuickBooks Payroll could work for your business with a free trial today.

Employing a Casual Worker: Frequently Asked Questions

What are Typical Casual Pay Rates?

Do Casual Employees Receive Superannuation?

If you’re employing a casual worker, and they’re over 18, you need to contribute to an approved superannuation fund on their behalf. Super contributions are required if the casual employee earns at least $450 in a calendar month from a single employer.

For workers under 18, the rules are slightly different; they must work more than 30 hours a week in addition to meeting the $450 monthly income threshold to be eligible for super. Details of any super contributions should be shown on the employee's payslip.

Can a Casual Employee Refuse a Shift?

What is a Casual Employee’s Resignation Notice Period?

How Long Can You be Kept as a Casual Employee?

Can Casual Employees Get Fired?

Yes, casual employees can be fired, but the process must follow specific legal and procedural guidelines. Since casual employees are not guaranteed ongoing work, employers can end their employment without providing notice unless stipulated in the employee's contract, award, or enterprise agreement. However, the dismissal must still comply with the general protections under the Fair Work Act, meaning casual employees cannot be fired for unlawful reasons such as discrimination, exercising workplace rights, or making a complaint about employment conditions.

Can Casuals Take Time Off Whenever They Want?

Casual employees have the flexibility to decline shifts. Unlike full-time or part-time employees, casuals are not required to formally apply for leave or provide a specific reason for their absence since there is no obligation to work a set number of hours.

However, if a casual staff member consistently declines shifts without communicating their availability or reason, it may impact their ongoing relationship with the employer.

Can a Casual Work Less Than Three Hours?

Under most awards, casual employees must be rostered for at least three hours per shift. This rule helps to provide casuals with a reasonable income for their time, as they do not have the same job security or benefits as permanent employees.

However, there are circumstances in which the minimum hours for casual workers can differ. If a casual employee voluntarily agrees to work shorter shifts or if the business operates under specific conditions (like in the retail or hospitality sectors), shorter shifts may be permissible.

Can Casuals Call In Sick?

Yes, but they are not entitled to paid sick leave. Casuals typically receive a higher hourly rate, which compensates for the lack of paid leave benefits, including sick leave. Despite this, casuals are still expected to notify their employer as soon as possible if they cannot attend a scheduled shift due to illness.

Some employers may request evidence, such as a medical certificate, depending on workplace policies or the length of the absence.

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A guide to employing casual workers

What Is A Casual Employee?

Unpacking the ‘No Firm Advance Commitment’

How Many Hours Does a Casual Employee Work?

When Does a Casual Employee Stop Being Casual?

Grow Your Business with QuickBooks

What Are The Rights Of Casual Employees?

Casual Loading

Minimum Requirements of the Workplace

Security vs Flexibility for Casual Employees

Additional Pay

Payroll Software from QuickBooks

Employing a Casual Worker: Frequently Asked Questions

What are Typical Casual Pay Rates?

Do Casual Employees Receive Superannuation?

Can a Casual Employee Refuse a Shift?

What is a Casual Employee’s Resignation Notice Period?

How Long Can You be Kept as a Casual Employee?

Can Casual Employees Get Fired?

Can Casuals Take Time Off Whenever They Want?

Can a Casual Work Less Than Three Hours?

Can Casuals Call In Sick?

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