As a casual employee the trade off for a higher than average or award wage has traditionally been a lack of entitlements, such as sick leave and annual leave. However, the Victorian Government is trialling a new scheme that will bring a change to this, with Casual member of staff now afforded up to five days or thirty-eight hours of sick leave at the minimum wage, paid for not by employers but instead by the government. We take a detailed look at the Victorian Government’s sick pay guarantee trial, considering the pros and cons for Australian businesses.
Background to the scheme
The Victorian Sick Pay Guarantee is a Victorian Government scheme, set to be trialled over the next 2 years which will see Victorian casual and contract workers entitled to claim up to thirty-eight hours, or five days pay for any sick days they have throughout the course of their employment over a 12-month period.
The catch phrase behind the scheme being, “no worker should have to choose between a day’s pay and their health or the health of a loved one,” was born about due to the Covid-19 pandemic which the nation, and in particular the State of Victoria has struggled to deal with in recent years. The scheme is viewed as a first step in tacking the issue of insecure workforces, which has been at the forefront of issues since the Covid-19 pandemic arrived.
In November 2020, the Victorian Government announced its plans to initiate the scheme, however key discussions with critical stakeholders including businesses, unions and employees only began in 2021 and involved these parties making submissions to the Victorian Governments Engage Victoria website.
Throughout the consultation process approximately 14,000 people visited the dedicated website with 1,000 parties submitting survey responses. From this data it was determined that 71% of survey participants did not have access to sick leave entitlements, with a large portion, 73% being female. The website also received forty submissions from key organisations, with a response that indicated that the scheme would have overwhelming support from workers, with businesses also supportive of a pilot, or trial scheme moving forward so long as it was designed in a way that did not duplicate casual workers entitlements such as those already provided for in the National Employment Standards (NES).
As a result of this consultative process, the pilot scheme was born, which has an anticipated cost of $256 million.
How it works
In order for individuals to access the scheme an employee must be a causal employee or be self-employed with no other employees (such as a sole trader), and ages over fifteen. The employee must not be entitled to receive any personal or sick leave entitlements from their employer, work at least 7.6 hours per week on average, physically in the state of Victoria and work in an eligible occupation. Those who meet these criteria will be paid the minimum national wage as at the date of the claim, for a maximum of thirty-eight hours or five standard business days in a 12-month period, with employees required to make a claim within 60 days of the absence from their employment.
The Victorian Government will entirely make the payments, with employers not bearing any of the cost associated with the scheme.
Not all employees are covered, with the scheme only applying in the initial trial or pilot phase, to select industries, which include; hospitality, retail, aged and disability services, cleaning and laundry services, warehousing and supply chain and security workers.
The scheme, whilst heralded as a positive step towards reducing unsafe work and improving the economic security of Victorian workers, has also been embraced by both casual employees and businesses.
Businesses in particular are appreciative of the governments attempts to ensure their covid safe workplace plans, which have taken considerable time and cost to implement, have a chance of succeeding, with employees no longer forced to choose between putting food on the table and attending work. Prior to the pandemic a staggering 84% of casual workers attended work whilst sick, simply to ensure they got paid.
However, not everyone is a fan of or optimistic about the scheme, with criticism coming from business and industry groups, who describe the scheme as a handbrake on Victoria’s pandemic recovery. Additionally, the state opposition also indicated that they would not hesitate to scrap the trial if they were elected in November. The Ai Group’s Tim Piper was particularly critical of the scheme, stating that the scheme was “deeply flawed,” calling it to be abandoned. The head of the peak employer association also suggested that it was the last thing that Victorian businesses needed, particularly as the scheme is likely to attract a hefty payroll levy in 2 years’ time, introduced by the Victorian Government as a way of continuing to fund the scheme on a long-term basis.
This sentiment was also shared by the Victorian Chamber of Commerce and Industry representative Paul Guerra who claimed that casuals already were compensated by the lack of sick leave entitlements with their 25% leave leading as part of their wage. Therefore, there is no need for the scheme.
What will this mean for employers and what you need to know?
As the Victorian Government is funding the scheme, there is not a lot that a Victorian business owner needs to know going forward. It is important that business owners are aware of the scheme, but from an administrative and payroll perspective there will be minimal changes required for business owners. Potentially business owners may find from time to time that they need to make adjustments to rostering and staff levels due to casual employees now being more likely to call in sick, and not attend work when they are sick. However, whilst the potential of increased absence is one thing that may be felt by business owners, this can also be flipped on its head to suggest that perhaps the incidents of sick leave may be felt less by businesses, as sick employees are likely to stay home rather than attend work, infect colleagues, and cause greater disruption. Time will certainly tell what the effects are for businesses, with the 2-year trial set to indicate which scenario is more likely.
How can Dreamstone HR help?
If you are looking for some further information or advice related to the Victorian Governments Sick Pay Guarantee, contact the team at Dreamstone HR today!
With more than 45 years of combined industry experience, our dedicated and professional team can assist in a variety of HR related services across your business which will enable you to focus on the things you do best, running your business!
The team at DreamStoneHR are ready to help, reach out to us today on (02) 8320 9320 or email@example.com.