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Casual Leave Entitlement Ruling – Impact on Financial Statements

In May 2020, the Federal Court ruled that some casual employees working regular and ongoing shifts have the right to certain benefits enjoyed by permanent staff, such as annual and personal leave and public holidays.

Notably, the court also ruled that topping up workers’ pay through casual loading does not offset leave liabilities. This essentially means that some casual employees could be entitled to both paid leave and casual loadings, typically worth 25 per cent of their pay.

Organisations that employ casual staff should review their contractual arrangements with these employees in light of the Australian Securities and Investments Commission’s (ASIC) update. Specifically, the corporate regulator is asking businesses to consider whether they should provide for back-pay owed to additional employee entitlements in their financial statements.

To view the ASIC information , click here

To view the CPA Australia guidance on this issue, click here

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