Globalization Partners

Australia: a Tight Labor Market Down Under

by Globalization Partners
July 2014
Reading Time: 2 minutes

Australia’s ingenious cultures which creates a collective “fix it” handyman (and handywoman) attitude has resulted in one of the most stable economies in a decade of flux. Companies have noticed and are hiring in droves. Need tips on how to hire your own genius team down under? Read on. Our Global Employee Leasing platform makes it easy to hire in Australia. Top facts to know before you go:

Statutory & Market Norm Benefits

  • Employees belong to a mandatory social security system. In general, we recommend that employers budget 17% on top of total cost of employment for the minimum cost of statutory benefits in Australia.
  • Under Australia law, full-time employees are entitled to a minimum of four weeks of vacation time per year. Untaken annual leave accumulates from year to year and is paid out on termination of employment. In practice, the market norm benefit for most full-time employees may be more; 25 to 30 days of vacation time per year in Australia is not uncommon. Vacation time is not reduced by time taken for sick leave or public holidays.
  • Full-time employees in Australia are also entitled to ten days’ paid personal, sick, or caregivers’ leave per year. Untaken sick leave accumulates from year to year but is not paid out on termination of employment. Sick leave (called personal leave in Australia) can be taken when the employee is unwell or to allow the employee to care for a family member who is unwell or affected by an unexpected emergency. Sick leave is funded by the employer rather than by the state.
  • In addition to paid annual leave and personal leave, most employees are entitled to paid public holidays. There are eight national public holidays:
    • New Year’s Day
    • Australia Day (26 January).
    • Good Friday
    • Easter Monday
    • Anzac Day (25 April).
    • The Queen’s birthday
    • Christmas Day
    • Boxing Day
    • There are also additional public holidays in each state and territory.

Termination in Australia

An employer must provide employees with the minimum statutory notice, which is based on the employee’s service as follows:

  • Less than one year’s service: one week’s notice.
  • Between one year and three years’ service: two weeks’ notice.
  • Between three years and five years’ service: three weeks’ notice.
  • More than five years’ service: four weeks’ notice.

The notice period is increased by one week if the employee is over 45 years of age and has completed at least two years of service with the employer. The law allows the statutory notice to be paid in lieu of notice.

Where an employer does not give the employee actual notice of termination in accordance with the above, the employee must be paid an amount equal to what would have been paid to (or on behalf of) them had they worked during the notice period.

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