Posted August 24, 2016
Annual leave also known as holiday pay allows an employee to be paid while having time off from work. The entitlement to annual leave comes from the National Employment Standards (NES). All employees, except for casual employees, get paid annual leave.
Annual leave applies to employees under The Hair and Beauty Industry Award 2010, during a period of annual leave an employee must also be paid an annual leave loading of 17.5% and form part of the National Employment Standards (NES).
How much annual leave does an employee get?
Under the NES, all employees (except casual employees) get paid annual leave based on the ordinary hours of work.
- A full time employee is entitled to 4 weeks’ annual leave for each 12 months of service.
- A part-time employee is entitled to paid annual leave on a pro-rata basis.
Calculating annual leave;
Under the NES, an employee’s entitlement to annual leave accrues progressively during a year of service according to their ordinary hours of work and accumulates year to year. This means if an employee on a full time basis has been employed for 3 months they would have accrued 38 hours in their balance of annual leave and are entitled to take this leave if requested.
To calculate an employee’s annual leave accrual, add up the total number of ordinary hours worked by the employee and then divide by 13.
How much is the employee paid?
The employer must pay annual leave at the employee’s base rate of pay for their ordinary hours during the period of leave. This doesn’t include separate entitlements such as incentive-based payments and bonuses, loadings, monetary allowances, overtime or penalty rates.
Under the Hair and Beauty Industry Award 2010 employees are entitled to be paid an annual leave loading of 17.5% during a period of annual leave.
Taking annual leave;
An employee can take paid annual leave when their employer has agreed to their request for leave. The employer must not unreasonably refuse to agree to a request to take annual leave. There’s no minimum or maximum amount of accrued annual leave that must be taken at a time.
Directing an employee to take annual leave;
The Hair and Beauty Industry Award states that employers can direct their employees to take annual leave by giving at least four weeks’ notice as part of a close-down of its operations for example in Christmas close down periods.
Cashing out of Annual Leave – new change!
The Hair and Beauty Industry Award 2010 has recently been changed for cashing out of leave. However, certain rules apply when cashing out annual leave:
- an employee needs to have at least 4 weeks leave leftover.
- a written agreement needs to be made each time annual leave is cashed out.
- an employer can’t force or pressure an employee to cash out annual leave.
- the payment for cashed out annual leave has to be the same as what the employee would have been paid if they took the leave.
On termination of employment an employer must pay an employee in respect of any accrued unused annual leave, including leave loading.
To ensure your salon is compliant and understanding your obligations as an employer, contact Hair & Beauty Australia on 02 9221 9911 or visit www.hair and beauty australia.com.au
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