FREE Online Course: Mastering the SCHADS Award
Introduction
This video explains the SCHADS Award, breaking down who it applies to, the sectors it covers, and the different types of employment under the award. It is designed to help employers and employees understand their obligations in clear, practical terms. The video covers full-time, part-time, and casual employment, including minimum engagement periods, classification of employees, and casual loading rates. It also explains the casual conversion process and payroll compliance considerations. While this video provides general guidance, viewers are encouraged to consult a qualified payroll professional or accountant for advice tailored to their specific circumstances.
Key Takeaways
- The SCHADS Award applies to employers and employees in Crisis Assistance and Supported Housing, Social and Community Services, Home Care, and Family Day Care sectors.
- Employers or employees covered by other modern awards (e.g., Aged Care, Fitness Industry) are not subject to the SCHADS Award.
- Employment types include full-time (38 hours/week), part-time (less than 38 hours/week), and casual, each with specific minimum engagement periods.
- Part-time employees can request an increase in minimum hours if they consistently work beyond their contracted hours for at least 12 months.
- Casual employees receive a loading (usually 25%) due to limited access to leave and can request conversion to full-time or part-time after 12 months of regular work.
- Employers must meet classification and minimum engagement requirements to ensure payroll compliance under the SCHADS Award
Transcript
Introduction and Course Information
To be a complaint, and don't worry, it's not going to be the ridiculous legal jargon on the Fair Work website. We're breaking this down so it's easy to understand and apply to your business.
By the way, if you work in a business under the SCHADS Award and you need to include this as part of your CPD or you need a certificate, we have a paid version of the course that will also issue you a certificate when you complete the course. It also includes bonus tools like our SCHADS compliance checklist to help you with processing payroll, and we keep the course 100% updated as changes come through with the SCHADS Award. I've also left links to access it below. Ready? Let's go.
Fair Work and the SCHADS Award
Fair Work is there to make sure that Australian employers are compliant with the modern Awards, but unfortunately, these Awards end up being so complex and highly specific that I find many employers aren't actually complying, especially when it comes to the SCHADS industry award. The SCHADS Award isn't the easiest to read because it goes on for pages and pages, and the legal jargon can be pretty tough to navigate.
In today's video, I'll be introducing the SCHADS Award, who it applies to, the sectors governed by the award, and the types of award employment. But before I start, I want to stress the importance of payroll compliance. This video is intended for general guidance—you should always consult with a qualified payroll professional or accountant who can provide you with tailored advice for your circumstances.
Coverage and Applicable Sectors
Okay, so first up we have coverage. Who does the SCHADS Award apply to? Which sectors are governed by its rules? Well, the industry award covers employers and employees throughout Australia in the following industries:
- The Crisis Assistance and Supported Housing sector
- The Social and Community Services sector
- The Home Care sector
- The Family Day Care scheme sector
The award doesn't cover any employer or employee that is already governed by another modern award. The SCHADS Award references the Aged Care Award, the Amusement, Events and Recreation Award, the Fitness Industry Award, the Health Professional Support Services Award, and the Nurses Award. This means if you're an employer already governed by one of those awards, the SCHADS Award won't apply to you.
Employee Classification
One part of the SCHADS Award that I find pretty comprehensive is the classification of employees. It's pretty detailed, so if you're feeling unsure about whether you're classified as an employee under the SCHADS Award, make sure you check out their classification list. I've left a link in the description box below.
Types of Employment
Once you figure out whether you're an employer governed by this award or an employee classified under the SCHADS industry, you'll need to understand the different types of employment. This is especially important for employers because it indicates your obligations with your different employees.
There are three types of employment categories under the SCHADS Award: full-time employees, part-time employees, and casual employees.
Full-Time and Part-Time Employees
A full-time employee under the SCHADS Award usually works an average of 38 hours per week over four weeks. A part-time employee works less than 38 hours per week, and their schedule is predictable. For example, Susan works an average of 20 hours a week between Mondays and Fridays, but Susan doesn't need to work a certain amount of hours per day. She can work 3 hours on one day and 5 hours another day, as long as there's a regular work pattern. In other words, she comes into work every day for a couple of hours.
However, Susan's workplace will need to ensure that she at least works the minimum engagement period. If she's a Social and Community Services employee, the minimum engagement period is 3 hours. If she undertakes Disability Services work, this all falls under any of the other SCHADS employee categories, her minimum engagement period would be 2 hours. So, on any given day, your part-time employee can't be asked to work only 1-hour shifts. Now, if you do, for some reason, need them to work fewer hours than the minimum engagement hours, you'll need to make sure that you pay them for the 2 or 3 hours, depending on their employment category.
Another thing to note about part-time employment contracts is that if an employee has frequently worked beyond their guaranteed minimum hours for at least 12 months, they'll be able to request an amendment to their employment contract to increase their minimum contracted hours. Using Susan as an example again, if you had originally contracted her to work only 4 hours a day, three times a week, and she's been doing that for at least 12 months, working 5 hours a day, four times a week, you're obligated to amend her agreement to increase her minimum contracted hours.
Casual Employees
Moving on to casual employees, a casual employee's terms of employment are pretty different from full-time and part-time employees. For example, they generally have no guaranteed hours of work, so they could work three 4-hour shifts this week and then be rostered on for six 5-hour shifts the following week. There is no regular pattern. However, you must keep in mind that the minimum engagement periods that apply to part-time employees also apply to your casual employees. So at the very least, they will need to be scheduled to work either a minimum of 3 hours per shift or 2 hours per shift, depending on whether they are Social and Community Services employees or they fall under a different classification.
Another thing to note about casual employees is that they receive a loading rate on top of their fixed hourly wage. The casual loading, which is usually 25%, is paid in recognition that casuals don't have access to most paid leave entitlements. To calculate the casual loading rate, you'll need to multiply their hourly rate by the percentage of the casual loading rate. For example, if a casual worker is paid the current national minimum wage of $24.10 per hour and their award or enterprise agreement stipulates a casual loading rate of 25%, the calculation would be as follows: their new total hourly wage would be $30.13.
You also need to keep in mind that if a casual employee starts working more regularly and there is a pattern to the shifts that they work, they can request to convert their employment type. However, there are a few preconditions that need to be met. For example, the employee is required to have been working for at least 12 months with the employer on a regular basis. If an employee hands in a casual conversion request, you can only refuse it on reasonable grounds after consulting with the employee. Reasonable grounds include, but are not limited to, if the conversion would require significant adjustments to a casual employee's hours of work or if the employer could foresee the employee's position as no longer existing in the next 12 months.
If you accept the request to convert, then you must discuss and record in writing whether the employee will become a full-time or part-time employee.
Conclusion
That wraps up the key details that you need to know regarding the different employment categories under the SCHADS Award. I hope this breakdown has helped provide some clarity around your obligations as an employer. Remember to check what classification your employee falls under and make sure you are meeting the minimum engagement periods for part-time and casual staff. In the next module, we'll dive into allowances.