or experience. • It is critical to correctly classify an employee based on this criteria, in order to avoid an underpayment claim.
2. CHECK THE FREQUENCY OF YOUR PAY CYCLE
• The Award provides for payment on a weekly or fortnightly basis.
3. KNOW THE DIFFERENCE BETWEEN FULL TIME, PART TIME AND CASUAL WORKERS
• Full-time workers are engaged to work an average of 38 hours per week. They may work reasonable additional hours – if provided for in the employment contract. Anything above ‘reasonable’ is considered overtime and should be paid accordingly. • Under a full-time arrangement, employees are entitled to 4 weeks’ annual leave and 10 days of personal/carer’s leave for every 12 months of service. This leave accrues weekly and rolls over year to year if unused. • Part-time workers are engaged to work a fixed number of hours per week, less than the 38 hours of a full-timer. • The hours and days of work should be agreed, so that the employee can reasonably predict their days and shifts each week. The shifts cannot be ‘flexible’ or variable and must be a minimum of three (3) hours in length. • The guaranteed hours may be exceeded, however overtime payments would apply. • Part-timers are entitled to a proportionate amount of leave entitlements, based on the agreed hours of work. This also accrues. • Casual employment is a more flexible arrangement. Workers are not guaranteed ongoing work or regular hours, with shifts rostered on an ‘as needed’ basis. • They are not entitled to annual or personal/ carer’s leave, but receive a loading to make up for this. They may still be entitled to compassionate leave, but will not be paid for this.
• Casual employees are entitled to a minimum daily engagement of at least 3 hours. Where you only require such employees to work for a shorter period, you can send them home but will need to pay them for at least 3 hours. • Be aware that if your casual staff become ‘regular and systematic’, with a reasonable expectation of ongoing employment, they may be deemed permanent and therefore entitled to permanent employee entitlements, such as access to unfair dismissal and parental leave.
4. BE AWARE OF YOUR OVERTIME OBLIGATIONS
• Overtime applies to all additional hours worked above ordinary hours. This is paid at a rate of time and a half for the first three additional hours, and double time for any hours after that. • Alternatively, an employee and employer may agree to the employee taking time off instead of being paid for a particular amount of overtime that has been worked by the employee. • The period of time off that an employee is entitled to take is equivalent to the overtime payment that would have been made. • Recent changes to the award provide that employees must take time off in lieu within 6 months after the overtime is worked. • Employers may also agree to pay their employee an all-inclusive rate for all hours worked, however this rate needs to be at least equal to or higher than the amount that the employee would be entitled to under the Award.
5. IS THE MINIMUM RATE SPECIFIED IN THE AWARD ENOUGH TO PREVENT AN UNDERPAYMENT?
• No. Permanent employees are also entitled to any relevant allowances, penalty rates, loadings or overtime as specified in the Award. • These have not been impacted by the recently
publicised Fair Work penalty rate changes.
6. CAN YOU ENGAGE INDEPENDENT CONTRACTORS OR PARTICIPATE IN ‘RENT A CHAIR’ ARRANGEMENTS?
• Independent contractors are usually engaged to perform non-core competencies, such as marketing or accounting functions. • Key indicators include taking on commercial risk and insurance and superannuation obligations as applicable. • Although there is no single definitive factor, behaviour such as wearing a uniform, representing oneself as an employee and/or the expectation of ongoing work are indicative of an employment relationship and may attract liability under the Fair Work’s sham contracting provisions. • A ‘Rent A Chair’ arrangement involves an agreement where a separate business owner occupies space in another salon, in order to service their own clients. • They will usually provide rental payments and their income will be split between the service provider and salon owner as agreed under a contract. • A proper ‘Rent A Chair’ arrangement involves a genuine Independent Contractor, with their own ABN and tax, super and insurance responsibilities.
SO WHY SHOULD YOU CARE?
As a salon owner, time is a valuable resource. For every hour you spend with clients, you’re generating income. However, for every hour you spend doing administrative work (including taking care of your employees), there’s an opportunity cost. Not only are you participating in a task that is income-neutral, you’ve also lost an hour you could have spent with clients. Confused? Call Cooee on (02) 8459 7093 or email Leanne: leanne@cooee.com.au
Beauty Biz Year 10 Issue 4
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