What You Need to Know About Hiring Casual Employees
Concerned that your casual employee is turning into a permanent employee, despite their casual contract? It is more common than you’d expect for businesses to take on casual staff and begin giving them regular hours and shifts without even realising it.
Find out everything you need to know about hiring casual staff, including what should be clarified in a casual contract.
What is a Casual Employee?
You may be surprised to learn that the term ‘casual employee’ does not have a definition in official employment legislation. This term is generally used to discuss an employee with no regular work pattern, guaranteed hours, or ongoing permanent contract.
Casual employees do not have to accept work offered, and employers do not have to offer them work. The basis of this type of employment is that casual employees can work whenever it suits both parties for them to do so.
If you have a casual staff member who tends to work in a regular pattern, you need to update their employment agreement to reflect their new status as a permanent part-time employee. If the regular pattern is only for a short time, to cover staff leave, for example, you could put them on a fixed-term agreement instead.
Examples of Situations When Hiring Casual Employees Can be Useful
Seasonal Work
Casual employees are most frequently hired for seasonal work. They are often employed in retail chains over the busy summer/Christmas period to deal with the extra influx of customers. Then, once mid-January rolls around, these people are commonly let go by no longer offered shifts.
Cover Other Staff
If you have issues covering shifts when your staff are away sick or even for more extended periods such as ACC or maternity leave, it can be useful to have some casual employees. The caveat is that you can call and ask them to work if someone is sick, but it is within their rights to decline the work.
What Are Casual Employees Entitled to?
In certain situations, casual employees may be entitled to bereavement leave and sick leave. The conditions are that it begins six months after they start working only if they have worked on average 10 plus hours per week and 40 hours a month or 1 hour each week across that period.
It is often not practical for casual employees to take annual holidays, as they do not have defined hours. The employer and individual often agree to pay out holiday pay as an extra 8% of gross when their wages are paid, in lieu of accruing annual leave.
How to Hire Casual Employees
Casual employees still require an employment agreement. The casual contract must make it clear that the person is a casual employee. Otherwise, they may be entitled to the same benefits as your other employees, as they are no longer considered casual.
The employment agreement should clarify that:
Hours will fluctuate
There are no set days of work or guarantee of work
The employee does not have to be available to work
How you will let them know when you have an offer of work for them
Every time the employee agrees to work, this is a new employment period
Are Casual Employees Entitled to Public Holiday Pay?
Casual employees, by definition, do not have a set work pattern, so they will not be entitled to public holiday pay if they do not usually work on that day.
However, ensure that you regularly review the days and hours of all of your casuals, as if they are found to be commonly working on that day of the week, or they would have been expected to work if it was not a public holiday you may need to pay them.
Can I Dismiss a Casual Employee?
You do not need to dismiss a casual employee, as you can stop offering them work instead. If you no longer want to engage this person, you do not need to offer them shifts. However, you should always seek advice on their working pattern to ensure they are not recognised as permanent employees and have certain rights around dismissal.
Need Help with Paying your Casual Staff?
Having casual staff on your team can complicate your payroll processes. Many employers manage this manually, whether you offer them annual leave or pay them an extra 8% of their wages. This leaves a lot of room for error.
Get assistance from Core Payroll to make it easier. We can run your regular payroll for you and take care of your casual employees’ allowances, even notifying you if it seems from their timesheets that they are at risk of being classified as regular workers. You will get a Payroll Consultant assigned to your business who you can ask the advice of whenever you’re unsure about a casual contract or any other payroll queries.