Casual employment changed meaningfully in August 2024, and a lot of small businesses are still running arrangements set up under the old rules. The short version: whether someone is casual now depends on the real substance of the relationship, not just what the contract calls it.

The definition

An employee is casual where, assessed on the real substance and practical reality of the relationship, there is no firm advance commitment to continuing and indefinite work, and they are entitled to a casual loading or specific casual pay rate. The contract matters, but so does what actually happens — the pattern of work, whether shifts are genuinely able to be accepted or declined, and whether the business in practice offers ongoing work.

Putting “this is casual employment” in a contract does not settle it. Someone working the same four shifts every week for two years, rostered months ahead, is going to look like a permanent employee no matter what the document says.

Why the loading exists

The casual loading — commonly 25% under modern awards — compensates for the entitlements casuals do not receive: annual leave, paid personal/carer’s leave, notice of termination and, generally, redundancy pay. It is not a bonus for flexibility. It is payment in lieu of specific things, which is exactly why misclassification is expensive: a worker found not to have been genuinely casual may be entitled to those benefits, and the loading paid does not automatically cancel them out.

The employee choice pathway

Rather than the old employer-initiated conversion offers, eligible casuals can now notify their employer that they believe they no longer meet the casual definition and wish to change to permanent employment. There are eligibility rules — a minimum period of employment, and limits on how often a notification can be made — and an employer must respond in writing within the required timeframe, consult the employee, and can only decline on specified grounds.

Small business employers came into this later than larger employers. If you have never had this conversation with a long-standing casual, it is worth understanding the process before the first notification arrives rather than after.

The Casual Employment Information Statement

Every casual must be given the Casual Employment Information Statement — not just once at the start, but again at defined points during employment. Small business employers have a different schedule from larger employers. It is a small obligation that is very easy to miss entirely.

What to review in your business

  • Look at your longest-serving casuals. Pull twelve months of rosters. If the pattern is regular and predictable and you have effectively guaranteed the shifts, the classification is worth reconsidering before someone else does.
  • Check the loading is actually being paid, at the rate the award requires, and that it is visible on the pay slip as a loading rather than absorbed into a flat rate.
  • Check your contracts reflect the current definition rather than pre-2024 wording.
  • Check the information statements are being issued on the right schedule.

A related trap

Businesses that get nervous about casual classification sometimes reach for an independent contractor arrangement instead. That is usually a jump from a small problem to a much larger one — see employee vs contractor, which changed at the same time and carries steeper consequences.

Casual employment is genuinely useful and entirely legitimate where the work is genuinely irregular. The risk is not in using casuals; it is in leaving someone classified as casual long after the work stopped being casual.