overtime, penalty rates and loadings

Overtime

Overtime is when an employee works outside normal working hours. It can include work completed:

  • beyond their ordinary hours of work

  • outside the agreed number of hours

  • outside the spread of ordinary hours (i.e.times of the day ordinary hours can be worked, for example 7am to 7pm)

The employee’s applicable modern award or other agreement will set out the rate of pay and when overtime applies.

Penalty rates

Penalty rates are higher rates of pay provided for under an award, enterprise agreement, individual flexibility arrangement or contract for work completed:

  • on weekends, public holidays or evenings

  • during early morning shifts or late night shifts

Workplace arrangements such as employment contracts or individual flexibility agreements can affect how penalty rates are paid.

Casual loading

Casual loading is an amount paid on top of the base rate of pay to casual employees. The purpose of a casual loading is to compensate casual employees for not receiving certain entitlements that permanent employees receive, such as paid annual leave, personal (sick) leave and notice of termination. Casual loading is paid on top of the employee’s base salary. For award or agreement-free employees, the casual loading is equal to 25% of the employee’s ordinary hourly rate of pay. Employees covered by awards or enterprise agreements should refer to their relevant industrial instrument to determine the appropriate casual loading.  

Some awards also specify employees must be paid for at least a certain number of hours for each shift – in other words, they can’t be called in and paid for just one hour.


more articles about: pay and reward