Q: We have identified a casual employee who is working as a permanent employee rather than a true casual.

We are going to issue a permanent contract, but the business has asked if we can “review to see if the 8% casual loading covers the annual leave entitlements.”

We haven’t had this situation previously, so I’m not entirely sure what to do here. Do we work out how much annual leave the employee would have accrued during her employment and then see if this matches the total 8% holiday pay paid to her?

A: The 8% paid is money it does not cover the time element of entitlement (taking the leave).

Under Section 28 if the employee was on a fix term and moves to a FT role then the 8% paid could come off the leave rate when taken but you have stated this is for a casual.

28When annual holiday pay may be paid with employee’s pay

(4)

If an employer has incorrectly paid annual holiday pay with an employee’s pay in circumstances where subsection (1) does not apply and the employee’s employment has continued for 12 months or more, then, despite those payments, the employee becomes entitled to annual holidays in accordance with section 16 and paid in accordance with this subpart.

So no they will get the entitlement and will get paid for it when taken and you cannot offset the 8% already paid.