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Know the difference. Permanent Vs Casual

Published October 30, 2016 (last updated December 7, 2020) Author: Employsure

Employsure often receives queries from employers who are confused when it comes to casual versus permanent employees. As there are key differences and entitlements which you as an employer need to be aware of, we have summarised the main features to consider.

Permanent employees

Permanent employees can be defined under a part-time or full-time agreement and are classified as having a guaranteed number of work hours per week. Mistaking a part-time employee as a casual is a common pitfall employers make. However, if your employee works part time but to regular set hours, they should be on a permanent part-time agreement.

Entitlements

Permanent employees are entitled to a paid day off on a public holiday, if it falls on a day they would normally have worked. If the employee does work the public holiday, they are entitled to paid time and a half, as well as an alternate day off.

All employees (permanent and casual) are entitled to four weeks of annual leave after they have worked for you for a continuous period of 12 months. Annual leave may be taken at any time that is agreed between you, their employer, and the employee.

Both part-time and full-time employees are entitled to five days of sick leave per year to care for themselves, or a dependant. They may also be entitled to other types of leave such as parental leave, garden leave, general election voting leave, defence forces volunteers leave, bereavement leave, and jury service leave if they meet certain conditions.

Casuals

Casual employees can be an incredibly useful resource for any business, as they are a way to meet your business needs, whilst maintaining a degree of flexibility. A casual employee works for your business intermittently and does not have set hours they must work during each rostered period.

A casual employee has no guarantee of hours, does not work regular patterns and is not obligated to agree to work when it is offered.

Entitlements

Casual employees are entitled to the same holiday leave entitlements as a permanent employee. However, as they do not have set hours you do have the option to negotiate to instead pay an additional 8% of their salary each pay, as an alternative to earning annual leave. If you would like to offer this to a casual employee, contact Employsure for assistance, as your employment agreement must include this clause.

If a casual employee has worked for you for a continual six month period, and works at least 10 hours a week on average and at least one hour every week or 40 hours in every month, they are entitled to sick and bereavement leave. They are not entitled to this leave if they do not meet this minimum requirement.

Employers must also ensure they follow a fair termination process for casual employees. You must act in good faith, rather than simply not calling the employee for another shift.

Employsure can assist with determining whether your employees are permanent or casual, and their associated entitlements. If you have any questions around your obligations as an employer, or would like to discuss your staff, contact us today on 0800 568 012.

About Employsure

Employsure is one of New Zealand’s largest workplace relations advisers to small and medium businesses, with over 5,500 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people.

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