Hiring your first employee can be a daunting challenge. The whole hiring process is difficult enough, but working out the legal requirements surrounding pay and employee benefits can be quite confusing. Australian employment law requires employers to provide many employee benefits, and breaching these legal requirements is serious. This article will set out the most important benefits you are required to provide to your staff.

1.   Salary

Clearly you need to pay your staff! The amount you are required to pay them will depend on a number of factors.

Firstly, you need to pay your staff a minimum wage. You can quickly check what the minimum wage is by perusing the Fair Work Ombudsman’s website.

Beyond the minimum wage, employers and employees are free to agree on a salary as long as the salary is in compliance with the Fair Work Act, which governs employment law in Australia. The Fair Work Act set up the Fair Work Commission, a body whose key role is to set awards. An award sets out the minimum terms and conditions of employment of particular types of employees, in addition to any legislated minimum terms. An award generally applies to employees in each industry or occupation. If your employee is covered by an award, you will need to pay him at least the amount set out in the relevant award.

In order to work out if your employee is covered by an award, use the online tool ‘Award Finder’ on the Fair Work Ombudsman website .

If you determine that a particular employee will be covered by an award, note down details of the award, classification and minimum salary payable – you will need these details for the Employment Contract.

2.   Superannuation

Superannuation is money that is set aside during a person’s working life and invested by the superannuation fund into which the money is contributed in order to provide for the person’s retirement. Employers are required by law to make superannuation contributions for most of their employees, which must be at least 9% of the employee’s ordinary earnings (up to certain limits).  Most employers make these superannuation contributions to a particular superannuation fund (known as a default fund).  However, most employees are able to notify their employer that they wish for their superannuation contributions to be made into another fund of their choice, by completing a Standard Choice Form.  Further information on superannuation is available from the Australian Taxation Office on their website (www.ato.gov.au).

You should review our legal information article on how superannuation works.

3.   Annual Leave and Sick Leave

Under the Australian legislation, all employees (except casual employees) must be paid annual leave based on their ordinary hours of work. Generally employees must be paid for 4 weeks of annual leave, although for certain occupations 5 week must be provided. The Fair Work Ombudsman provides a leave calculator, which can assist you in working out the exact entitlement. Bear in mind that part-time employees will only be entitled to a pro-rata amount of annual leave.

Full time employees are also entitled to 10 days paid personal leave (for sick and paid carer’s leave) per year. Again, this is pro-rated for part-time employees.

4.   Parental Leave

Employees get unpaid parental leave when a new child is born or adopted. Parental leave includes maternity leave (for mums), paternity leave (for dads and partners) and adoption leave as well as other types of special leave.

The minimum entitlements to parental leave apply to all employees in Australia, even if they aren’t covered by the National workplace relations system.

Employees can also have extra entitlements, such as paid parental leave, under an award, agreement, company policy or another law (e.g. the Australian Government Paid Parental Leave scheme). These entitlements can’t be less than the entitlements in the National Employment Standards.

5.   Long Service Leave

Long service leave is an Australian quirk; a period of paid leave that all employees are entitled to if they have been working for the same business for a long period of time. Long service leave can generally only been taken after 10 years of continuous service, so it’s becoming less common.

Conclusion

It’s vital that the Employment Contract you agree have your employee sign covers all of the above mentioned benefits. The LegalVision Employment Contracts all cover these points, so get started now!

Lachlan McKnight

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