Casual Overtime

Casual Overtime and Minimum Requirements – updated resource

Written by: Institute of Certified Bookkeepers

Effective from the first full pay on or after 20th November 2020 Fair Work Commission revised several (97) awards in relation to overtime payments, minimum engagement periods and conversion from casual to permanent employment.
These changes are (some may already apply in the award):

  • Casual employees are now entitled to overtime rates once they work in excess of 38 hours.
  • Casual employees may be entitled to payment for minimum hours, e.g. Work 1 hour, however minimum payment is for 3 hours so they are paid for 3 hours work. (You will need to check your respective individual award for determination)
  • Casual employees that have been employed for longer than 12 months are entitled to request to have their employment ‘converted’ to full-time or part-time work if certain conditions are met, namely:
    • a qualifying period of 12 calendar months;
    • the casual employee must have engaged in work with a pattern of hours on an ongoing basis over the required 12-month period, which may continue to be worked on a full-time or part-time basis without the need for significant adjustment.
    • NOTE: Some award provisions can vary. e.g., some awards provided for the right to request casual conversion after 6 months.

The employer is to provide a copy of the new casual conversion clause and letter template to all casual employees employed and within 12 months of their employment commencing.

The casual employee is required to put their request in writing if they want to be considered for a permanent part-time or full-time position.

The employer is required to respond in writing to the casual employee within 21 days of receiving the request. If refusing they will need to state the reason why.

It is important to always check the modern award to determine if these changes are relevant since not all the awards have been affected.

Some details of these Awards that have been amended are outlined below. Always check the relevant Award for the finer details, updates, and changes.

How is Overtime for Casuals Calculated?

The way overtime is calculated is dependent on the award. In some awards it includes casual loading on both normal hours and overtime hours; and in others, casual loading is only on normal hours and not on overtime.

Note: With the recent changes to 97 awards, you will need to check the Individual Industry Award for the calculation and payment of Overtime worked for casual employees.

Penalty rates may also be required if the award states this.

Example: General Retail Award

Overtime applies when an employee works:

  • More than 38 hrs per week or average 38 hours per week over a roster cycle; or
  • More than 12 hrs on any day, excess is overtime

Award clause for payment of overtime is inclusive of casual loading:

21.2 (c) (i) Hours worked by casual employees: shall be paid at 175% of the ordinary hourly rate of pay for the first three hours and 225% of the ordinary hourly rate of pay thereafter (inclusive of the casual loading).
21.2 (e) The rate of overtime for casual employees on a Sunday is 225% of the ordinary hourly rate of pay, and on a public holiday is 275% of the ordinary hourly rate of pay (inclusive of the casual loading).

Penalty payments
22.1 (b)
A casual employee must be paid 145% of the ordinary hourly rate of pay for work performed after 6.00pm – Monday to Friday (1 October 2020 to 28 February 2021) inclusive of the casual loading.
A casual employee must be paid 150% of the ordinary hourly rate of pay for work performed after 6.00pm (from 1 March 2021) inclusive of the casual loading.

Saturday Work
A casual employee must be paid 150% of the ordinary hourly rate of pay for all work performed (inclusive of the casual loading).

Sunday work
A casual employee must be paid 175% of the ordinary hourly rate of pay for all work performed (inclusive of the casual loading).

Public Holiday
A casual employee must be paid 250% of the ordinary hourly rate of pay for all work performed (inclusive of the casual loading).

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