Casual employees in Australia are entitled to 25 per cent casual loading under most modern awards, access to the “employee choice pathway” to permanent employment after 6 months (12 months if employed by a small business), unpaid personal and carer’s leave, unpaid family and domestic violence leave, protection from unfair dismissal after the minimum employment period (subject to the regular and systematic test), and superannuation at 12 per cent from 1 July 2025. The new casual definition applies from 26 August 2024 under the Closing Loopholes No. 2 Act 2024. This is the 2026 employer compliance checklist. Skip to the 15-point checklist at the bottom for the printable version.
Why this matters now?
The casual employment framework changed materially on 26 August 2024. The definition of casual is no longer about whether the contract says “casual”. Regulators and courts look at the substance of the arrangement. Getting it wrong exposes you to underpayment claims, Fair Work Ombudsman penalties, back-paid leave, and, in the worst cases, reclassification across an entire workforce.
What a casual employee is under the Closing Loopholes definition
From 26 August 2024, a person is a casual employee if, when they start employment:
- The employment relationship has no firm advance commitment to ongoing work, taking into account a set of defined factors, and
- The employee is entitled to a casual loading or specific casual pay rate under a modern award, registered agreement, or employment contract.
Reference: Fair Work Ombudsman – Casual employment changes.
The “no firm advance commitment” test is behavioural, not contractual. The factors a regulator or tribunal will consider include:
- Whether there is a clear mutual understanding of ongoing work
- Whether the employer can elect to offer, and the employee can elect to accept or reject, work
- Whether regular patterns of work have emerged
- Whether full-time or part-time employees perform the same work
- Whether the employer’s business operates with a degree of predictability that allows a firm commitment
A worker engaged as a “casual” on paper, who has worked fixed hours every week for six months, with no elections or rejections, is unlikely to satisfy the casual test under the new definition. That worker has a path to permanent employment and rights that may already have accrued.
Why this changed
The new definition replaced the narrower, contract-focused test that applied briefly after the 2021 amendments. Parliament restored a substance-based test to match how Australian workplaces actually operate. The change applies to both employees engaged from 26 August 2024 and, with specific transitional rules, to employees engaged before that date.
The 25 per cent loading
Most modern awards prescribe a 25 per cent casual loading. This is the premium paid to compensate for entitlements the casual does not receive.
What the loading replaces
Casual loading is paid in lieu of:
- Paid annual leave
- Paid personal/carer’s leave
- Paid public holidays when not worked
- Notice of termination
- Redundancy pay
It does not replace superannuation, unpaid leave entitlements, or the right to a safe workplace.
How to calculate it
Casual loading is calculated on the base ordinary hourly rate of pay. If the award base rate is $30.00 per hour, the casual ordinary rate is $30.00 × 1.25 = $37.50 per hour.
For penalty rates:
| Time | Award base rate | Casual loading | Penalty rate | Total hourly |
|---|---|---|---|---|
| Ordinary hours | $30.00 | 25% | Nil | $37.50 |
| Saturday (150%) | $30.00 | 25% | 50% | $52.50 |
| Sunday (200%) | $30.00 | 25% | 100% | $67.50 |
The calculation approach depends on the award. Some awards compound the loading and penalty, others add them to the base. Always check the specific award. The Fair Work Ombudsman pay guides give the correct compounding for each award.
Common mistakes
- Paying 25 per cent on the overtime rate rather than the base rate when the award requires compounding on base
- Rolling the loading into a single higher “all-in” rate without ensuring the all-in rate actually covers all entitlements (BOOT-compliant)
- Paying 20 per cent because of a historical practice – most awards require 25 percent
- Paying no loading at all and assuming the casual contract displaces the award
Notice, termination, and unfair dismissal
Notice of termination
Casual employees do not receive statutory notice of termination under the National Employment Standards. In practice, however:
- Some modern awards or enterprise agreements prescribe minimum notice for casuals
- An employer should still provide reasonable notice where the engagement has been ongoing
- Terminating a casual to avoid casual conversion obligations can itself be a breach
Unfair dismissal
Casual employees can access unfair dismissal protection if:
- They have completed the minimum employment period (6 months, or 12 months if employed by a small business employer with fewer than 15 employees)
- They were employed on a regular and systematic basis during that period, and
- They had a reasonable expectation of continuing employment
Reference: Fair Work Commission – Periods of service as a casual employee.
Employers who believe casuals can be dismissed at any time with no recourse are behind on the law. A casual who has worked regular shifts for 12 months at a small business, or 6 months elsewhere, has the same dismissal protection as a permanent employee.
General protections
Separate from unfair dismissal, general protections apply to casuals from day one. A casual dismissed because they exercised a workplace right, raised a safety concern, or were absent on sick leave can make a general protections claim regardless of length of service.
Leave entitlements for casuals
Casuals have fewer leave entitlements than permanent employees, but the list is longer than many employers realise.
Unpaid personal (sick) leave
Casuals are entitled to two days of unpaid carer’s leave per occasion under the National Employment Standards. This is leave to care for an immediate family or household member who is ill or injured.
Unpaid compassionate leave
Two days of unpaid compassionate leave per occasion on the death or serious illness of an immediate family or household member.
Unpaid family and domestic violence leave
Casuals are entitled to 10 days of paid family and domestic violence leave per 12-month period (note: this has been paid since 1 August 2023 for all businesses, including small business employers from 1 August 2023). This leave is paid at the casual’s ordinary rate of pay that would have been payable had they worked.
Long service leave
Long service leave rules are state-specific. In some states, casuals accrue long service leave after 7 or 10 years of continuous service. A regular casual pattern of work over many years can accrue entitlement. Check the relevant state act (Long Service Leave Act in VIC, NSW, QLD, SA, WA, Tas, ACT, NT).
Community service and jury service
Casuals have the same right to take unpaid community service leave (including jury service) as permanent employees.
What casuals do not receive
- Paid annual leave
- Paid personal (sick) leave
- Paid compassionate leave
- Notice of termination (except where an award or agreement provides otherwise)
- Redundancy pay
The 25 per cent loading is the compensation for these entitlements not accruing.
Casual conversion and the employee choice pathway
From 26 August 2024, casual conversion works through the employee choice pathway. The employee initiates, not the employer.
When can a casual elect?
A casual employee can provide written notice to the employer to change to permanent (full-time or part-time) employment if:
- They have been employed for at least 6 months (or 12 months if the employer is a small business, defined as fewer than 15 employees), and
- They believe they no longer meet the requirements of the casual employee definition (that is, a firm advance commitment to ongoing work has emerged)
What must the employer do?
Within 21 days of receiving the written notice, the employer must respond in writing with one of:
- Accept the notice and offer permanent employment (part-time or full-time)
- Refuse the notice, with reasons, on specified grounds
Grounds to refuse
An employer can refuse on grounds including:
- The employee still meets the casual definition (no firm advance commitment to ongoing work)
- Substantial changes to the employer’s operations would be required to accommodate conversion
- The refusal is for “fair and reasonable operational grounds”
Refusal must be in writing, must identify the grounds, and must be communicated within the 21-day window. The employee can dispute a refusal through the dispute resolution process, ultimately to the Fair Work Commission.
Casual Employment Information Statement
Employers must provide the Casual Employment Information Statement (CEIS):
- On commencement (to every new casual)
- After 6 months of employment (non-small business)
- After 12 months of employment (small business)
- After every 12 months of employment thereafter (non-small business)
The current CEIS is published by the Fair Work Ombudsman at fairwork.gov.au. Failure to provide the CEIS is a breach of the Fair Work Act.
Our casual conversion rules 2026 guide covers the conversion process in full.
Superannuation for casuals
The Super Guarantee rate is 12 per cent from 1 July 2025 (and remains 12 per cent thereafter). The old threshold of $450 per month was removed from 1 July 2022, so super is payable from the first dollar of ordinary time earnings for casuals as for any other employee, regardless of hours.
Casuals under 18
Employees under 18 must work more than 30 hours per week for SG to apply. This is a narrow exception; most adult casuals have no hours threshold.
Ordinary time earnings for casuals
Ordinary time earnings for casuals includes the base hourly rate plus casual loading. It does not include overtime payments (unless the award defines the overtime rate as part of ordinary hours, which is rare).
Payment timing
From 1 July 2026, “payday super” takes effect: SG contributions must be paid on or within seven calendar days of each pay day, not quarterly. Employers running casual workforces with weekly or fortnightly pay cycles need a payroll system that can support this timing. Reference: ATO Super Guarantee.
Labour hire casuals: who carries the obligation?
A host business engaging a labour hire worker on a casual basis is not the worker’s employer. The labour hire agency is. The agency:
- Pays the casual loading
- Meets the Superannuation Guarantee obligation
- Issues the Casual Employment Information Statement
- Handles any employee choice pathway notice from the worker
Host businesses do not manage casual conversion for labour hire workers. The obligation sits with the agency. However, the host should be aware that if the same labour hire worker has been on-site for 12 months under a regular pattern of work, the agency may convert the worker to permanent employment. This can affect the charge-out rate and the worker’s availability.
Host businesses engaging their own casuals (separate from labour hire) carry the full set of obligations directly. If your business has a mix of labour hire and direct-hire casuals, both compliance regimes apply.
Record keeping requirements
Under the Fair Work Regulations 2009, employers must keep records of:
- Employee’s name, status (casual, part-time, full-time), start date
- Pay rate, hours worked per day, loadings, allowances, deductions
- Superannuation contributions (amounts, dates, fund)
- Leave taken and leave balances (even for unpaid leave, the records matter)
- Written communications about casual conversion / employee choice pathway
- Agreements on flexible work
- Any termination records (date, reason, notice)
Records must be kept for 7 years. Fair Work inspectors can request records during audits. The Fair Work Ombudsman issues infringement notices for record-keeping breaches.
The 15-point employer compliance checklist
Print this. Stick it on the wall. Review it every quarter.
- Casual status check. For every casual on the books, is there a written contract that says casual? Is the contract factually consistent with how the worker is engaged?
- No firm advance commitment. Does the working pattern actually reflect no firm advance commitment to ongoing work? If the worker has done the same 38-hour week for six months with no variation, the “casual” label may not survive scrutiny.
- Casual loading paid correctly. 25 per cent (or the award-specified rate) on the base ordinary rate. Verify the compounding method for penalty rates and overtime.
- Casual Employment Information Statement issued. On start, and at the 6-month/12-month/annual intervals required for your employer size.
- Award identified correctly. Each casual is covered by a modern award. Confirm the award. Use the FWO pay calculator to verify rates.
- Super Guarantee at 12 per cent. Paid on ordinary time earnings (including loading), from the first dollar.
- Payday super-ready (from 1 July 2026). Is payroll ready to pay SG within 7 days of pay day?
- Long service leave. State-specific accrual tracked for long-tenure casuals.
- 10 days paid family and domestic violence leave. Available to every casual, paid at the ordinary rate.
- Unpaid carer’s leave. 2 days per occasion. No paperwork barrier to taking it.
- Employee choice pathway response process. Named owner in HR, template response letters, 21-day response clock, documented grounds to refuse if applicable.
- Unfair dismissal awareness. Minimum employment period (6 or 12 months) plus regular and systematic test. Do not dismiss casuals on false assumptions of immunity.
- Record keeping for 7 years. Payroll records, leave taken, communications about conversion, all dated and retained.
- Labour hire casuals: verify the agency is compliant. The agency holds the obligation, but the host should know the agency is meeting it. Include this in the labour hire agreement.
- Policy review annually. Casual employment policy, conversion process, leave policy, all reviewed against Fair Work Ombudsman guidance each year.
This is the framework. Customising it to your workforce size and award coverage is the next step. Small businesses (under 15 employees) have slightly different timing rules (12-month conversion window, 12-month CEIS re-issue). Non-small business employers have the 6-month and 12-month touchpoints.
| Requirement | Small business (<15 employees) | Non-small business |
|---|---|---|
| Minimum employment period for unfair dismissal | 12 months | 6 months |
| Employee choice pathway trigger | After 12 months | After 6 months |
| Casual Employment Information Statement timing | On start, after 12 months, then annually | On start, after 6 months, after 12 months, then annually |
| Redundancy pay (not applicable to casuals) | N/A | N/A |
A “small business” under the Fair Work Act is an employer with fewer than 15 employees at a particular time. Count all employees, including regular casuals engaged on a regular and systematic basis. Part-time employees count as one each (not pro-rata). Labour hire workers engaged by an agency are not counted as the host’s employees.
Common compliance failures to fix this week
The Fair Work Ombudsman audits labour-hire-heavy industries regularly. The top issues Fair Work finds are:
- Casuals not issued a Casual Employment Information Statement
- Loading paid on the wrong rate (base versus ordinary versus overtime)
- No written response to employee choice pathway notices within 21 days
- Termination of long-tenure casuals without awareness of unfair dismissal access
- Records missing or inadequate
If any of these apply to your business, address them before the next audit. The cost of remediation is always less than the cost of FWO penalties.
Read Also:
Labour Hire vs Contractor
Casual Conversion Rules 2026
Need labour hire workers, or help reviewing your casual workforce compliance?
Wise Recruitment and Consulting supplies warehouse, logistics, food processing, and manufacturing labour hire across Melbourne and Sydney. We are a licensed Victorian provider (VICLHL10427) and we manage casual compliance, Fair Work obligations, and Super Guarantee payments for every worker we place. Request a quote for labour hire or call 1300 021 673.
Frequently Asked Questions
A: Generally no. The National Employment Standards do not require notice of termination for casuals. Some awards or agreements may require notice, so check the relevant instrument. Note that a casual who has been engaged regularly and systematically for the minimum employment period (6 or 12 months) can pursue unfair dismissal. Ending that engagement still needs a valid reason and a fair process.els.
A: Yes. A casual who has worked on a regular and systematic basis for the minimum employment period (6 months, or 12 months in a small business) with a reasonable expectation of continuing employment can access unfair dismissal protection. The casual label does not immunise the employer. General protections claims are also available to casuals from day one of employment.
A: Under most modern awards, casual loading is 25 per cent. A small number of enterprise agreements may provide different rates. The 20 per cent figure is a common misconception, possibly from older award instruments. Always check the specific award or agreement. The Fair Work Ombudsman pay guides give the current loading per award.
A: There is no statutory maximum number of hours for a casual employee under the Fair Work Act, beyond the reasonable additional hours rules that apply to all employees. Modern awards typically require minimum engagement periods (e.g. 3 or 4 hours per shift) but do not cap total weekly hours. Hours worked on a regular and systematic basis for an extended period may change the casual characterisation.
A:Casuals receive: 2 days unpaid carer’s leave per occasion, 2 days unpaid compassionate leave per occasion, 10 days paid family and domestic violence leave per 12 months, unpaid community service leave (including jury service). Casuals do not receive paid annual leave, paid personal leave, paid compassionate leave, notice of termination, or redundancy pay. Long service leave accrual is state-specific.
A: Yes, unless the employment contract, award, or enterprise agreement specifies a notice period. The National Employment Standards do not require a casual to give notice. In practice, providing notice is good practice and supports a reference for future work. Employers should not enforce a notice clause on a casual that was not properly incorporated into the engagement terms.
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