Employment and labor laws vary from country to country. This guide is intended to provide the most up to date information available. We will update this guide as needed when changes are made to the laws.
Employment Contracts
Employers are legally required to provide formal written contracts for all employees that include salary/wage, termination terms, job title, etc. The contracts must be written in English and use the Australian Dollar currency (AUD).
Working Hours
The National Employment Standards (NES) sets the maximum number of working hours at 38 hours a week. This applies to all employees covered by the national workplace relations system, regardless of any award, agreement, or contract.
Overtime
All overtime requests must be agreed upon between the employee and the employer. Employers need to provide an assessment of whether additional hours are “reasonable” before approving overtime. Overtime rates are generally set within the contract, most commonly 200.00% of the regular salary pay rate for the first 3 hours of overtime and 150.00% of the typical salary pay rate thereafter.
Public Holidays
There are 13 public holidays in South Australia. Holidays which fall on a weekend move to the next working day.
For the year 2024:
- Jan 1: New Year’s Day
- Jan 26: Australia Day
- Mar 11: Adelaide Cup Day (Subject to proclamation)
- Mar 29: Good Friday
- Apr 1: Easter Monday
- Apr 25: Anzac Day
- Apr 25: Anzac Day
- Jun 10: King’s Birthday
- Oct 7: Labour Day
- Dec 24: Christmas Eve (7pm-midnight Part-day public holiday)
- Dec 25: Christmas Day
- Dec 26: Boxing Day
- Dec 31: New Year’s Eve (7pm-midnight Part-day public holiday)
Annual Leave (vacation)
All employees (except for casual employees) get paid annual leave as stipulated by The National Employment Standards (NES) contained in the Fair Work Act 2009 (Cth). In general, all employees are entitled to a minimum of 4 weeks (20 working days) paid leave (5 weeks for shift workers). The NES states that awards, contracts/agreements cannot contain any less than this minimum, but they can contain a greater number of days.
The NES also states that if the period during which an employee takes annual leave includes a public holiday, a period of another kind of leave (including sick leave, personal leave, etc.), that time is not regarded as annual leave. Annual leave is paid at the same rate as the regular salary rate, but where there are exceptions within the employee’s award/contract/workplace agreement, there can be an additional annual leave payment of up to 17.50%.
In addition, each state in Australia has an entitlement for employees to have long service leave for South Australia. This leave is 13 weeks after the first ten years of service, with 1.3 weeks’ leave for each full year of service after the initial ten years.
Sick Days
The NES entitles permanent employees to 10 days paid sick leave and two days of paid compassionate leave per year (personal/carers leave). This is funded by the employer.
An employee may take this paid personal/carer’s leave if they are unfit for work because of their own personal illness or injury or provide care or support to a member of their immediate family.
Maternity / Paternity Leave – see Family / Parental Leave
Family / Parental Leave
The paid parental leave provides financial support to eligible working parents of newborn or recently adopted children. Parental leave is up to 20 weeks. The leave may be taken by either parent at the time of birth, adoption, or surrogacy. Each partner is required to take at least 2 weeks. An employee is not entitled to parental leave under the NES unless they have 12 months of continuous service or are a “long-term casual employee.” The casual employee must have been employed regularly and systematically for at least 12 months.
Parental leave is paid by the government at the national minimum weekly wage rate.
Employers can also provide for paid parental leave in registered agreements, employment contracts, and workplace policies which do not affect the employee’s eligibility for the Australian government’s paid parental leave scheme so the employee can be paid both.
Employers can also provide for paid parental leave in registered agreements, employment contracts, and workplace policies which do not affect the employee’s eligibility for the Australian Government’s Paid Parental Leave Scheme so the employee can be paid both.
In addition, employees who have worked for more than 12 months are entitled to at least 12 months of unpaid parental leave if the employee is or will be responsible for caring for a child or adopted child under 16 years old.
From 6 June 2023, parents who request unpaid leave for a period greater than 12 months will have a stronger right to request an extension of unpaid parental leave. If an employee has already taken 12 months of unpaid leave, they can request a further 12 months of unpaid leave (24 months in total). This is provided that their partner has not already taken 12 months of unpaid leave.
All salary payments are initially made by the employer and later reimbursed by the government.
Other Leave
The NES stipulates employees are entitled to be absent from work for three main reasons, all to undertake community service activities.
Employees receive payment for jury service, employees receive jury service pay from the government and employers then top this up to their usual pay for up to 10 days at the rates set.
Voluntary emergency management activity is unpaid leave. Activity in community service that the regulations prescribe is also an unpaid leave.
The leave period includes reasonable travel and rest time before and following the eligible activity, and the employee must aim to provide as much prior notice and information as possible.
Employee Severance and Terminations
Termination Process
There are several complex laws relating to termination processes in Australia. To ensure the correct process is followed, employers must adhere to the four key areas below to ensure the termination of an employee for the right reasons.
- Capacity – if an employee lacks the ability or capacity to complete the job
- Performance – unsatisfactory performance of the employee, which is outlined clearly to the employee with the opportunity for them to rectify their conduct
- Misconduct – failing to adhere to workplace standards, or if the employee is involved in serious misconduct
- Redundancy – if the job the employee is completing is no longer necessary for the business, or technological change has made their role unnecessary
Employees must have completed six months of service (12 months for a small company) before they can make an unfair dismissal claim.
An additional legal requirement for the employer is to provide the employee with an employment termination letter that must include confirmation of:
- the reason for the termination
- the date of the employee’s last day of work
- the fixed number of payments/entitlements etc. and any unpaid wages the employee will receive as final pay
Notice Period
The Fair Work Act 2009 (Cth) stipulates that the minimum notice periods for termination varies with the employee’s length of service as below:
- Less than 1 year of employment: 1 weeks’ notice
- 1-3 years of employment: 2 weeks’ notice
- 3-5 years of employment: 3 weeks’ notice
- 5+ years of employment: 4 weeks’
In addition, if an employee is over 45 years of age and has completed at least two years’ continuous service, there is a requirement for an additional week of notice.
However, it is common practice in Australia for the award/contract/ workplace agreement to have a more extended period of notice than the minimum requirement; this is commonly four weeks’ notice. Despite the minimum notice periods provided in the Fair Work Act 2009 (Cth), employees who have no notice period specified in their contract of employment may be entitled to what is called in Australia ‘a reasonable period of notice’.
The reasonable period of notice will set a notice period of greater than the norm, and minimum, for employees with long lengths of service and/or where equivalent jobs/skills are in short supply.
Severance Pay
An employer must not terminate an employee unless they have given the minimum period of notice or paid the employee instead of giving notice. This is paid at the employee’s full pay rate as if they had worked the minimum notice period.
All employees must be paid the full final pay as detailed in their award/contract/ workplace agreement together with the appropriate notice-related payments/documentation.
Should an employee be made redundant, redundancy pay is based on the amount of continuous service the employee has and paid based on their regular base salary pay rate as below:
- Less than 12 months of service: 0
- At least 1 year but less than 2 years: 4 weeks’ severance pay
- At least 2 years but less than 3 years: 6 weeks’ severance pay
- At least 3 years but less than 4 years: 7 weeks’ severance pay
- At least 4 years but less than 5 years: 8 weeks’ severance pay
- At least 5 years but less than 6 years: 10 weeks’ severance pay
- At least 6 years but less than 7 years: 11 weeks’ severance pay
- At least 7 years but less than 8 years: 13 weeks’ severance pay
- At least 8 years but less than 9 years: 14 weeks’ severance pay
- At least 9 years but less than 10 years: 16 weeks’ severance pay
- At least 10 years: 12 weeks’ severance pay*
There are some exceptions to this entitlement. An employment contract, enterprise agreement, or modern award may also specify a greater entitlement.
Probation Period
The commonly used probation period is six months (12 months for a small company), although this can be greater or less as stated in the award/contract/ workplace agreement.
The Fair Work Act 2009 (Cth) does not refer to probation periods. Still, it stipulates that the award/contract/ workplace agreement must clearly specify the period of probation set and how and when performance is to be reviewed.
Payroll Cycle
Employees in Australia are employed on contracts that stipulate the pay cycle, and although there are part-time, casual, and independent contractor pay types with set pay cycles, the most common are:
- Monthly payroll (with payment due by the last day of the month)
- Bi-weekly payroll (with payments due every second week on a set day, usually mid-week, Wednesday, or Thursday)
- Bi-weekly payroll (with payments due every second week on a set day, usually mid-week, Wednesday, or Thursday)
13th Salary
There is no legislation for 13th-month payments in Australia.
Minimum Wage
As of July 2023, the Fair Work Commission confirmed the national minimum wage in Australia as 23.23 AUD per hour, 882.80 AUD per month for a full-time award-free adult employee who is not an apprentice or a trainee. Each classification level has a different minimum pay rate. As of July 2023, Modern award minimum wages will also increase by 5.75%.
Most states fall under the Fair Work Act 2009 and work to the national minimum wage, however, there may still be some exceptions for state or local government employees.
Remote Work
The Australian government passed the “Secure Jobs, Better Pay” Act legislation that introduces the right for workers to request flexible working arrangements to include not just those who have a disability and those who are aged 55 and older but also to employees who are pregnant and those who have experienced family or domestic violence.
Employers will be required to meet with employees to discuss their flexible work arrangement requests. Employers will need to evaluate such requests and try to accommodate the requests including offering alternative arrangements. If the employer and employee cannot reach an agreement, then an employer is entitled to reject the request on reasonable business grounds. The employer should provide a written explanation of the reasons for refusal within 21 days of receiving the request.
Employees will be allowed to apply to the Fair Works Commission (FWC) to challenge an employer’s refusal or a failure to respond to a flexible work arrangement request. The FWC will have the power to conciliate and arbitrate, including ordering employers to provide additional explanation, granting the employee’s request, or ordering alternative arrangements to accommodate the request.
*This table does not include an additional Medicare levy surcharge of between 1.00% and 1.50% applies to certain higher-income taxpayers who are not covered by health insurance for private patient hospital cover.
VISA
Under the Migration Act 1958 and the Migration Regulations 1994, employers have a legal obligation to ensure all employees have the right to work in Australia. Even if they already live in Australia and are not Australian Citizens, they may be permanent residents or New Zealand Citizens on a special class of visa that allows them to remain in Australia indefinitely or have a temporary visa. All these types of visas need to be checked regularly by the employer via the Department of Home Affairs’ online verification system, the Visa Entitlement Verification Online (VEVO).
If employers cannot find the appropriate person with the required skills/experience etc. for a job, they can make an application to sponsor a worker temporarily or permanently. However, skilled workers must generally be included on the “Skilled Occupations List,” and the length of sponsorship is set by the length of time in the sponsored visa.
There are several ways to sponsor a skilled foreign worker:
- Sponsor a skilled worker for permanent migration through the Employer Nomination Scheme (ENS) or the Regional Sponsored Migration Scheme (RSMS)
- Sponsor a worker on a temporary visa through the Temporary Skill Shortage visa (subclass 482), which allows overseas people to come to Australia to work for up to 4 years.
- Take over the sponsorship of temporary migrants already in Australia on skilled work visas.
- Enter a labor agreement that allows you to employ several overseas skilled workers on a permanent or temporary basis by entering a formal labor agreement with the Australian government if the job is not on the Skilled Occupations List.
VAT
The standard rate of GST in Australia is 10.00%.