National Employment Standards include a provision for annual leave. In this article, we explain those entitlements for you so you can work confidently.
You can avoid disputes by understanding annual leave entitlements. Below are our insights.
Firstly, for each year of service at your startup, your employee is entitled to 4 weeks of paid annual leave.
Annual leave will accrue progressively during a year of service based on your employee’s ordinary hours of work.
If your employee leaves before a year is up, they are entitled to be paid for unused annual leave that accrues until their employment ends.
A written policy for taking annual leave is useful. It can help with making sure that processes such as adequate notice to you, are provided for leave requests.
Leave can be taken at a time agreed by the employee and employee and must not be unreasonably refused by an employer.
You can agree to your employee cashing out an amount of their annual leave. As long as the employee will be left with a minimum of 4 weeks leave.
Also, a separate agreement is needed each time a request to cash out is granted.
If loading applies, because of a provision in an employment contract, enterprise agreement or award, this will need to be paid to the employee.
Further, leave loading is typically 17.5%.
Full-time and part-time employees have to be paid their usual wages during a shut down unless their award or agreement says otherwise.
Casual employees don’t have to be paid during shut downs.
If your award or agreement doesn’t say anything about shut downs or directions to take leave, you can’t force employees to use their leave. You can negotiate with them to take paid or unpaid leave but if they don’t agree you can’t force them.
Full time workers are entitled to 4 weeks annual leave.
Annual leave can be cashed out as long as the worker will be left with a minimum of 4 weeks annual leave.
Check any applicable awards for shut down periods.
If in doubt, get advice from a good lawyer for startups.