A rundown of the changes relating to personal/carer’s leave for employees and what it means for business owners.
Personal/carer’s leave forms part of the National Employment Standards (NES) that applies to all employees covered by the national workplace relations system, regardless of any award, agreement or contract of employment.
A recent decision has clarified the way personal/carer’s leave accrues and is taken under the Fair Work Act 2009. Even though the decision has been appealed and may consequently change in the future, if your business engages full-time or part-time employees, the current decision still stands and it means you will need to review how you accrue and pay personal/carer’s leave.
What is personal/carer’s leave?
There are two instances when an employee might take personal/carer’s leave.
The first is when the employee is unfit for work because of their own personal illness or injury (including pregnancy-related illness). The second is when the employee needs to care for or support a member of their immediate family due to illness, injury or an unexpected emergency.
When paid personal/carer’s leave is taken, the employee must be paid at their base rate of pay for the ordinary hours they would have worked during the period. For example, If they were due to work four ordinary hours, you pay four hours. If they were due to work 12 ordinary hours, you pay 12 hours.
In additional to paid leave entitlements, an employee is also entitled to two days of unpaid carer’s leave for each occasion when a member of the employee’s immediate family or household requires care or support because of a personal illness, injury, or an unexpected emergency. Casual employees also have the right to take this unpaid carer’s leave, although they have no paid personal/ carer’s leave entitlement.
What are the changes?
Full-time and part-time employees are entitled to ten days of paid personal/carer’s leave for each year of service. This leave is not prorated for part-time employees; they are entitled to the full ten days per year regardless of how many days or hours they work per week. Rather than being accrued and paid in hours, this leave must now be accrued and paid in days, or part days.
An employee who takes a full day of paid personal/ carer’s leave is entitled to be paid for all ordinary hours falling on that day and should have one day deducted from their balance.
Employees who are entitled to accrue a greater number of personal/carer’s leave days, through an industrial instrument, contract or policy provision, will continue to receive this greater entitlement.
As a business owner, what do you need to do?
To begin with, update your HR/payroll system so that personal/carer’s leave balances are shown in days and part days, not in hours.
From now onwards, ensure that both full-time and part-time employees accrue ten days of personal/carer’s leave per year of service. The accrual rate is calculated as one day of personal/carer’s leave for every 5.2 weeks of service.
When an employee takes paid personal/carer’s leave, pay the employee for all ordinary hours they were rostered to work that day. For one day of paid personal/ carer’s leave taken, the employee should be deducted one day from their balance.
Points to note
Any unused personal/carer’s leave in a year carries over into the next year. It can be ‘cashed out’ as long as the employee retains a balance of at least 15 days of untaken paid personal/carer’s leave, provided certain conditions are met.
Unused personal/carer’s leave is not paid on termination of employment, unless specified in an applicable industrial instrument, contract or policy.
These changes apply to employers and employees who are covered by the Fair Work Act 2009; it does not apply to state system employers.
Read the fact sheet about the changes to personal/ carer’s leave on the Fair Work Ombudsman website.