Easy peasy lemon squeezy
By Jenni Leonard
Understanding the leave entitlements applicable to your employees should be “easy peasy lemon squeezy” but many employers find it confusing. Even more so with the Christmas holidays approaching. Here are 5 tips covering leave entitlements for national system employers (Fair Work).
I’m sick, you’re going to pay me right?
Understanding personal / carer’s leave
Often referred to as “sick leave”, personal / carer’s leave can be used by your employees for two purposes:
When they are unfit for work due to personal illness or injury; or
When they need to provide care or support to a member of their immediate family or a member of their household because of:
personal illness or injury affecting them; or
an unexpected emergency affecting them.
Let’s look at some examples.
Your employee, Bob, has broken his ankle playing football at the weekend. He is entitled to Personal / Carer’s leave because he is injured and unfit for work.
Bob needs to take his daughter to the orthodontist to have braces fitted. Bob is not entitled to Personal / Carer’s leave because his daughter is not unwell or injured. You would suggest Bob take annual leave in this instance.
Now Bob needs to go to the dentist for a check up. Bob is not entitled to Personal / Carer’s leave because he is actually fit for work.
Bob’s ex-wife has been in a car accident and taken to emergency at the hospital. Bob is entitled to Personal / Carer’s leave because an ex-spouse is considered immediate family and she’s experienced an unexpected emergency.
I’m sick, you believe me don’t you?
A bit about medical certificates
As an employer, you are entitled to ask your employee to provide evidence to confirm why they have been away from work. Best practice is to have a written policy (that your employees are informed about) that states when medical certificates need to be provided. Most commonly this is for 2 or more consecutive days but it’s up to you what you do. Your policy should be written with your business needs in mind.
Have you ever suspected that a medical certificate isn’t authentic? Let’s be honest, it wouldn’t be too difficult to throw together a fake one. But don’t assume a medical certificate is dodgy just because it looks like it is. It is OK to call the medical practice to follow up and seek confirmation that the medical certificate was issued. So it might be worth a quick call before you rush in and terminate your employee for presenting a fake medical certificate.
I need a holiday, can I take some leave?
How annual leave works
The National Employment Standards set out that employees are entitled to four weeks of paid leave for every year of service.
Don’t forget to check the applicable Award as it may contain more beneficial annual leave entitlements. For example, in many Awards shift workers get five weeks of annual leave per year and they often contain a provision entitling employees to 17.5% annual leave loading.
If your employee is employed part-time, their annual leave entitlement is on a pro-rata basis. For example, if you have an employee that works 4 days a week they will accrue 16 days of annual leave per year.
Note - Annual leave doesn’t accrue on overtime hours.
I’m broke, can I cash out my annual leave?
Understanding how this works
Annual leave that hasn’t been used can only be cashed out in two circumstances:
For Award covered employees – only if there is a provision in the Award that allows cashing out of annual leave. Make sure you read the Award carefully. The Awards include very specific rules on how this is agreed between you and your employee, outline if there are limits to the amount cashed out and the minimum annual leave balance that must remain when making cashing out agreements.
For Award free employees – by agreement in writing between the employee and the employer. Note that this agreement cannot be entered into if it would result in the employee’s remaining accrued entitlement to paid annual leave being less than 4 weeks.
Give me a break, I’ve been working here forever!
Long service leave entitlements
Full-time, part-time and casual employees are entitled to Long Service Leave (LSL). LSL entitlements are:
8-2/3 weeks of paid leave after 10 years of continuous service; then
4-1/3 weeks of paid leave for every 5 years of continuous service after that.
Continuous service means “unbroken” service. It’s important to note that while unpaid leave doesn’t count as service, it does not break an employee’s service. For example, an employee who has worked for you for 10 years and took 1 year of unpaid parental leave during this time won’t be entitled to LSL until they reach 11 years.
While an employee isn’t entitled to take their LSL until they have reached 10 years of continuous service, they are entitled to be paid out their LSL if they resign or terminated between 7 and 10 years of continuous service. Did you know that if you terminate an employee because of serious misconduct this does not apply?
Questions?
Is your payroll system set up to manage leave entitlements? Do you have any other burning questions about leave entitlements for your employees? Give us a call on 9841 1200.
ATO Reinstates Truckies' Allowances to $99.60 for 2018
By Sheila Murray
Following pressure from the industry, the ATO has reinstated the meal allowance for truck drivers back to $99.60. This means that for the year ended 30 June 2018, employers are able to pay meal allowances (of up to $24.25 for breakfast, $27.65 for lunch and $47.70 for dinner) without deducting PAYG, provided that the employer expects that the employee truck driver will incur these expenses on overnight trips. If the employer includes meal allowances on the PAYG Payment Summary (or if the employee chooses to show the allowance on their tax return), then the employee can claim a deduction of up to $99.60, provided they can demonstrate that they actually spent that amount. More information is available here.
