Casual Employees

Casual employees are those where there are no guaranteed hours of work, no regular pattern of work, and no ongoing expectation of employment. Each time the employee accepts an offer of work it is treated as a new period of employment.

There's more information about different types of employees on MBIE's website.

It's important to clearly define the casual working arrangement in the employment agreement. Employment rights and responsibilities also apply to casual employees, but the way in which annual holidays, sick and bereavement leave are applied can vary for these employees.

Work Pattern and Otherwise Working Days

If the employee is casual and working irregular hours and days, the most appropriate Employee Work Pattern is usually No Regular Week. This will mean PayHero will use their recent time entries and your company review period to calculate their Otherwise Working Days (OWDs) for public holidays and other types of leave.

Annual Leave entitlements

Casual employees are often paid Holiday Pay As You Go, which means they receive their 8% Holiday Pay entitlement in every pay, and they aren't able to take paid annual leave. It's important to clearly specify the Holiday Pay As You Go arrangement in the employment agreement, and to show the Holiday Pay as an identifiable component of the employee's pay. There's more information about HPAYG on MBIE's website.

Time entries

It's important that casual employees record their hours and days worked by entering timesheets, so you have a clear record of when they worked. You can do this easily in PayHero by inviting the employee into your account so they can record their time using the employee portal or mobile app, or by using PayHero Shift photo timeclock. 

Public Holidays

Just like any other employee, casual employees are entitled to public holidays which fall on a day that they'd usually work.

If the day is an OWD, and the employee did not work, they will be paid their Average Daily Pay. If they did work, they will be paid time and a half and will accrue one day Alternative Leave. 

Other Leave

Casual employees are also entitled to Sick Leave, Bereavement Leave, and Family Violence Leave after 6 months of starting work if during that time they have worked:

• an average of at least 10 hours a week, and
• at least one hour a week or 40 hours a month.

PayHero can automatically apply these checks to your employees when they reach their sick leave anniversary. This is an optional feature that can be enabled on your payroll settings page. There's more information here: Automatic Extension of Sick Anniversary

Average Daily Pay

Casual employees don't have set hours per day, so PayHero can't calculate their Relevant Daily Pay. Public Holidays, Sick Leave, Bereavement Leave, and Alternative Leave will therefore be paid at the employee's Average Daily Pay (ADP).

This is their average pay per day for the past 12 months, or since their start of employment if that is less than 12 months. It's important to restart the employee each time they accept a new offer of work to reset their Start Date for Average Daily Pay and to use time entries so PayHero knows how many days they have been paid. 

If you do know how much the employee would have been paid if they had worked on that day, you can override the leave rate in their draft pay. 

New period of employment

Each time the employee accepts an offer of work it is treated as a new period of employment. To do this, first finish the employee by adding a Finish Date on their Employment tab.  Click Apply, then click New Employment and enter their new Start Date to restart them. 

If you had previously removed them from your regular pay cycle, add them back to the pay cycle so they'll be included in your pay runs.

Final Pays for Casual employees

If the employee has been paid Holiday Pay As You Go, they shouldn't have any outstanding Holiday Pay or Annual Leave to be paid at their end of employment, but they might have accrued Alternative Leave if they worked on a public holiday. This can be paid out in a Final Pay. 

If they haven't worked for you for some time, and you need to pay out their Alternative Leave, set the pay period of their final pay to the same as their last wages pay, so their Average Daily Pay is correct. 

If they don't have any leave entitlements, you don't need to create their Final Pay. Just enter their Finish Date and remove them from your regular pay cycle. 

Changing from Permanent to Casual

If an employee needs to change from permanent to casual, you'll need to check their Pay and Work Pattern options on their Employment tab. It's also a good idea to check their Default Pay tab in case they have any regular payments or deductions that need updating.

The employee's Notes tab can be used to keep a record of any changes to their employment. 

Learn more on what to do if an existing employee needs to change to Holiday Pay As You Go here: Changing Permanent Employees to Holiday Pay As You Go

Changing from Casual to Permanent 

If an employee needs to change from casual to permanent, you'll need to check their Pay and Work Pattern options on their Employment tab. It's also a good idea to check their Default Pay tab in case they have any regular payments or deductions that need updating.

The employee's Notes tab can be used to keep a record of any changes to their employment. 

Learn more on what to do if an employee on a Pay As You Go arrangement becomes permanent here: Changing Pay-As-You-Go Employees to Permanent