Casual employment agreements are often used to support businesses during busy periods. However, there are implications if there are changes resulting in regular work pattern.
A true casual employee has:
· ‘as needed’ shifts with no guaranteed hours and can decline to work
· has no regular work pattern
· no ongoing expectation of employment
The employer can agree to pay 8% holiday pay in each payrun (pay-as-you-go) however this is only available to true casual employees.
If the employees are offered regular hours for more than a few months there is a risk the employee could be deemed a permanent employee. Permanent employees have a legal expectation of regular work, entitled to statutory holidays and can not receive 8% holiday pay as-you-go. If your casual employee wants a regular work pattern their employment agreement should be updated.
A change from casual employee to permanent employee often requires changes in your specific payroll software. Sometimes, it requires the casual employee to be exited and setup as a new employee.
Please be aware that if an employee is being treated as casual but doesn’t meet the above ‘true casual’ criteria, they may be entitled to take paid holidays even if they have been receiving 8% holiday pay.
Contact Tim Doyle or Jane Evans today to discuss any employment queries (or any other matter) on 07 823 4980 or email us. Our office is in Cambridge, NZ, but distance is no problem. We have many international and national clients.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.