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 standard workweek is 38 hours. Monday-Friday work week.
Overtime
Minimum employment conditions are outlined in the Fair Work Act, 2009 and Industrial Awards. Awards are either industry-based or occupation-based. Employees covered by Awards are generally paid overtime. Most Awards provide for overtime to be paid for time worked in excess of 38 hours per week, or in excess of 10 hours per day. Overtime or a penalty is generally paid to Award based employees for work performed on a weekend or a public holiday.
If an employee is not an Award employee, they are considered to be “Award Free.” Award Free employees do not have a statutory right to be paid overtime. However, such employees do have the right to work only 38 plus reasonable additional hours per week. There is no formal definition of what is “reasonable additional hours,” however, such employees are generally expected to work overtime hours that are necessary to complete the job they are employed to do.
Public Holidays
Public holidays vary by state.
Paid Time Off Mandatory Vacations
Full-time employees are entitled to 4 weeks of paid leave per year, while employees who work in shifts receive 5 weeks.
Sick Leave
Employees are entitled to 10 days paid leave per year which can be used if the employee is sick or if they need to care for a family member.
Maternity and Paternity
Maternity Leave
Mothers are entitled to 12 months unpaid maternity leave after working for 12 months with the same employer. Some employers provide paid maternity leave.
In addition, employees can apply to the Federal Government scheme which provides payment for 18 weeks of maternity leave.
Paternity Leave
Fathers are entitled to 5 days unpaid leave at the time of the birth or adoption of a child.
Employees can also apply to the Federal Government scheme for additional leave.
Parental Leave
Parental leave includes maternity and paternity leave, as well as leave for when a child is adopted. To be eligible, an employee must have completed at least 12 months of employment.
Parental leave is an unpaid leave that lasts for 12 months, and it is possible to request an additional 12 months from the employer.
Other Leave
Bereavement
2 days’ paid leave
Employee Severance and Terminations
Termination Process
Reason for termination varies based on the number of employees an employee has and the length and type of service:
- 15 employees Length of Employment: Up to 6 months Type of employees: Permanent Reasons for terminations: No specific reason is needed
- Over 15 employees: Length of Employment: 6 months+ Type of employees: Permanent Reasons for terminations: A valid reason is needed
- 15 employees or less: Length of Employment: Up to 12 months Type of employees: Permanent Reasons for terminations: No specific reason is needed
- 15 employees or less or less Length of Employment: 12 months + Type of employees: Permanent Reasons for terminations: A valid reason is needed
- Casual employees: Length of Employment: N/A Type of employees: Casual Reasons for terminations: Once employed for 12+ months, there must be a valid reason
Employees dismissed in the first 6 months of employment (or 12 months of employment if employed by a small business) cannot make a claim of “unfair dismissal” to the Fair Work Commission. However, there are some exceptions to this known as General Protections matters where there is no minimum engagement period applying.
Unfair dismissal applications are heard in the Fair Work Commission – a specialist employment tribunal.
Notice Period
The notice period is determined by the amount of time the employee has been employed:
- 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’
If the employee is over the age of 45 and has been employed for at least 2 years, they are entitled to an additional week of notice.
Severance Pay
Severance pay is given based on a continuous period of service, and the pay rate is given for ordinary hours worked:
- 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
Probation Period
The probation period is 6 months, however, if an employer has 15 employees, it is extended to 12 months. In addition, employers are able to shorten the minimum probation period. In doing so, however, the employer forgoes the benefits of a probation period.
Payroll Cycle
Employees are paid weekly, bi-monthly, or monthly.
There are no legal requirements to when an employee needs to be paid by, however, it is common to pay employees by the following schedule:
- Monthly – By the 28th to the 30th of the month
- Bi-weekly – Every second week on any agreed day (usually Wednesday or Thursday)
- Bi-monthly – Every 15th and 30th
As of July 1, 2021, the minimum wage in Australia increased to 20.33 AUD per hour (772.60 AUD per week).
Remote Working
General
The Australian government passed the “Secure Jobs, Better Pay” Act legislation that introduces the right for workers to request flexible working arrangements to include no 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.
Income Tax
Employer Payroll Contributions
VISA
Australia has a diverse range of Visas that are intended to suit various professions. Each visa is unique and has specific requirements.
- Employer Nomination Scheme (ENS) visa: Employers nominate an employee to live and work in Australia. Under this scheme there are three subclasses:
- Direct entry stream
- Labor agreement scheme
- Temporary residence transition stream.
Processing time for these visas can take anywhere from 6-17 months.
- Temporary activity and specialist visas – Short stay work visa for specific types or highly specialized work.
Temporary Work Visas
- Temporary Skill Shortage visa – sponsorship needed
- Temporary Graduate visa
- Skilled – Recognized Graduate visa
- Skilled Regional (Provisional) visa
- Business Innovation and Investment (Provisional) visa- Sponsorship needed
Permanent Work Visas
- Regional Sponsor Migration Scheme – Sponsorship needed
- Permanent Residence (Skilled Regional) Visa Open for applications November 2022
- Employer Nomination Scheme visa- Sponsorship needed
- Skilled Independent visa
- Skilled Nominated visa – Sponsorship needed
- Skilled Regional visa
- Business Innovation and Investment (Permanent) visa – Sponsorship needed
- Business Talent (Permanent) Visa – Sponsorship needed
- Distinguished Talent visa – Sponsorship needed
VAT
General
Goods and Service Tax (GST) is 10%.
