Employee benefits can attract and retain top talent while ensuring the well-being and satisfaction of the workforce. In Australia, the government has several mandated benefits that companies must provide to their employees.
This blog explores the important employee benefits that companies should offer to their employees as required by law. These benefits are aimed at promoting work-life balance, financial security, and overall job satisfaction.
Paid Annual Leave
Paid annual leave is one of the fundamental benefits that all employees in Australia are entitled to under the Fair Work Act 2009. This benefit allows employees to take time off for rest and recreation, fostering a healthy work-life balance.
Full-time employees are granted a minimum of four weeks of paid annual leave per year. Part-time employees receive a proportionate amount based on the number of hours they work.
Sick and Carer’s Leave
Employees facing illness or who need to care for a family member are eligible for paid sick and carer’s leave. This benefit ensures that employees can take time off when they are unwell without worrying about losing income.
According to the Fair Work Act, full-time employees are entitled to ten days of paid personal leave per year. Part-time employees receive a proportional amount based on their working hours.
Parental Leave
Parental leave is for employees who are expecting or adopting a child. The Australian government provides various forms of parental leave, including unpaid parental leave and government-funded paid parental leave.
Eligible employees can take up to 12 months of unpaid parental leave, while eligible primary caregivers can receive up to 18 weeks of government-funded paid parental leave.
Some companies may have a certain combination of parental leave durations for both primary and secondary carers, coupled with return-to-work support options.
Long Service Leave
Long service leave is designed to reward employees for their long-term commitment to a company. After a specified period of continuous service, usually ten years, employees are entitled to an extended period of paid leave, which is currently pegged at 8.67 days.
The specific entitlements vary between states and territories, but it generally ranges from 8-13 weeks of paid leave after ten years of service. Even if an employee is terminated, each state or territory’s Long Service Leave law mandates paying them an amount corresponding to a certain number of long service leave days and pro-rata leave days.
ATO Deductions
Employers must make deductions from their employees’ wages for income tax, Medicare levy, and other government-mandated deductions according to the rates specified by the Australian Taxation Office (ATO). These deductions are essential for funding various public services and welfare programmes.
Superannuation
Superannuation, or super, is a retirement savings plan mandated by the federal government, which legislated it as the Superannuation Guarantee (Administration) Act 1992. Employers are required to contribute a percentage of their employees’ earnings – the Superannuation Guarantee (SG) – to a superannuation fund, which is meant to provide financial security for retirement.
Under the FY24 Federal Budget, the SG rate stands at 11 per cent, with the end-goal to increase it by 0.5 per cent every year until it reaches 12 per cent as of 1 July 2025. The government also legislated that starting FY27, the super will be paid out alongside the net weekly pay instead of every quarter.
The ATO will have more authority to crack down on employers who withhold supers, which is estimated to cost workers up to $4.7 billion a year.
Public Holidays
Employees in Australia are entitled to be absent from work on public holidays, and if they work on such days, they should be paid additional rates, commonly referred to as penalty rates. This benefit allows employees to enjoy public holidays with their families and friends and compensates those who work on these special days.
Annual Wage Review
The Fair Work Commission conducts an annual wage review to determine the minimum wage in Australia. Employers must adjust their employees’ wages according to the new minimum wage set by the Commission to ensure fair compensation for their work. The Fair Work Ombudsman states that the current minimum wage level as of 1 July 2023 is at $23.23 per hour or $882.80 per week.
Health and Safety Benefits
Ensuring a safe and healthy work environment is a must for all Australian employers. Companies are required by law to provide appropriate safety measures, training, and equipment to protect their employees from workplace hazards. Failure to comply with health and safety regulations can result in severe penalties for the employer.
Workers’ Compensation Insurance
In Australia, all employers are obligated to have workers’ compensation insurance, which offers both financial assistance and medical coverage to employees who experience injuries or illnesses in the workplace. This insurance coverage ensures that employees are protected and fairly compensated in case of accidents or injuries at the workplace.
Employee benefits form an essential component of the overall employment package. Providing essential benefits not only fulfils legal obligations but also contributes to a motivated and loyal workforce.
Adhering to these regulations can help companies create a positive work environment that attracts and retains top talent, leading to increased productivity and success for both the organisation and its employees.
DISCLAIMER: This article is for informational purposes only and is not meant as official business advice. Please consult your business coach and solicitor.
