What Are the Different Types of Employment?
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There are eight main types of employment. Understanding these various employment types and what employees with these different contracts are entitled to, can help you decide what type of employment would suit you best. It can also help you understand the employment arrangement you're agreeing to when you sign a work contract. In this article, we list the common categories of employees.
What are the 8 types of employment?
Different types of employees have different wage and leave entitlements. They also work different hours and have various responsibilities when requesting time off and terminating their employment. The most common employment categories are:
1. Full-time employment
Full-time employment is the most common employment classification. Full-time employees work regular hours and have full leave entitlements. Their salary packages include superannuation if they are over 18 and earning more than $450 a month (before tax) or under 18, earning more than $450 a month and working more than 30 hours a week. Most full-time employees work between 38 and 40 hours, but they may work more or fewer hours depending on their employer or industry award. A full-time employee and their employer usually decide how many hours the employee works together. Full-time employees receive the following annual benefits:
Four weeks paid annual leave
10 days paid sick or personal leave
Two days paid compassionate leave per incident
Three months' unpaid sick leave
Two days unpaid carer's leave per incident
Five days unpaid family and domestic violence leave
18 weeks paid parental leave
12 months unpaid parental leave after the birth of a child, after working for an employer for 12 months
Long service leave, amount varies between states and territories
Full-time employees also get public holiday pay if a public holiday falls on their regular workday. Full-time employment contracts are open-ended contracts. That means employees get hired for unspecified periods, with their contracts only ending when an employer or employee terminate them. Employers expect their full-time employees to attend work regularly and give advance notice for taking leave and terminating their contract. In return, employers must also give notice before dismissing full-time employees, unless they violate their contract terms. Employers may offer terminated full-time employees redundancy payments or pay out their notice periods.
2. Part-time employment
People with part-time employment also have open-ended contracts. They have similar benefits and responsibilities to full-time employees. They also work a regular number of hours that is less than full-time employees. They may regularly work on set days of the week or have irregular shifts, as part-time nurses and retail workers do. Part-time employment often suits parents, students and people with health conditions that make full-time employment challenging. Like full-time employees, eligible part-time employees also receive superannuation as part of their salary packages. However, as they work fewer hours, they receive less superannuation.
Part-time employees have the same unpaid leave entitlements as full-time employees and receive paid leave on a pro-rata basis, depending on the number of hours they work. Like full-time employees, they get public holiday pay if a public holiday falls on their usual workday. Employers also expect part-time employees to attend work regularly, request leave in advance and give notice before terminating their employment. In return, employers also give notice before dismissing part-time employees. They may give part-time employees similar payments after terminating their contracts.
3. Casual employment
People with casual employment work irregular hours, according to the business's needs. This employment arrangement often suits high school and university students who enjoy working around study and social commitments. Casual employees have open-ended contracts, which continue until they're terminated or upgraded to full- or part-time employment. Casual employees are responsible for checking their rosters and working their scheduled shifts or swapping them with another employee. Their employers may call them to cover shifts outside their rostered work when the business is busy or other employees are unwell. Casual employees are free to accept or decline these shifts.
After working for the same employer for 12 months, casual employees may qualify for long service and parental leave. Employees meeting the salary and workload requirements also receive superannuation on a pro-rata basis, depending on the number of hours they work. However, they take unpaid holidays and sick leave. To offset this, casual employees receive casual loading on top of the standard hourly pay rate. Unless their award or employment contract requires, they can also take holidays or end their employment at any time, without a notice period.
4. Contract employment
People with contract employment, also known as fixed-term employment because it involves a fixed-term contract, work for an employer for a set period. These contracts have clear start and end dates. Businesses often hire contractors to perform particular tasks or work on specific projects. They may also hire them to boost staff numbers during busy periods or replace employees on leave. After the contract ends, the employer and contractor may part ways or negotiate another contract. This may be another fixed-term contract or, if the employee has proven themselves to be a valuable asset, an open-ended full-time or part-time contract.
Contractors may work as full-time, part-time or casual employees during their contract period. Depending on the length of their contract, contractors often receive the same pro-rata leave entitlements that regular full-time, part-time and casual employees have. They may also receive superannuation. Employees expect their contractors to work out their entire contract period. While contractors can take leave, many contractors delay taking holidays until their contracts end to minimise disruptions for their employers.
People who have apprenticeships are new to trade industries. This employment type gives them practical experience in their chosen trades while they're working towards vocational qualifications. Apprentices work under the supervision of trained and registered tradespeople. They typically have more responsibilities over time. They receive the same benefits as regular tradespeople, including leave and superannuation. Businesses must formally register their apprenticeships to make sure their work counts towards their qualifications.
Employees pay apprentices rates outlined in their registered agreements or awards. Rates vary depending on whether the apprentice is an adult or high school student and the length of the apprenticeship. Employees avoid paying payroll tax on their apprentice wages. An apprenticeship is a fixed-term contract lasting as long it takes for the apprentice to receive their qualifications. The most skilled and reliable apprentices typically get full-time employment contracts with the companies they trained with after earning their qualifications.
People who have traineeships are new to non-trade industries, such as the media, banking and advertising. Like apprentices, trainees receive practical experience in their chosen career while they work towards a qualification. Employers closely supervise trainees, especially early in their traineeships. Traineeships are usually registered.
Trainees also receive award wages, or wages outlined in their registered agreements, and standard employee benefits such as leave and superannuation. Companies avoid paying payroll tax on the wages of their trainees. Businesses often transition their best trainees to full-time employment contracts.
7. Employment on commission
Employment on commission, also called piece rate employment, is an employment type where people work on a specific single task. For example, a council may employ an artist on commission to paint a mural on a public wall. The artist receives a set agreed amount for the piece of art they create, rather than an hourly or weekly wage for the time they spent creating it. A commission is a fixed-term contract which only lasts for the named project. However, if the person who commissioned something is happy with the work produced, they may commission further works.
People paid on commission have flexible working conditions. They can set their own hours, so long as these hours see them produce the commissioned work by the timeline they agreed on. They make their own superannuation payments, rather than relying on employee contributions. They also take unpaid leave.
Employees often start working for a company on probation. Probation is a short period lasting from a few weeks to a few months, depending on the employer. While they are on probation, employees familiarise themselves with the business and their new role. They may work on a full-time, part-time or casual basis, depending on the position they accepted. During the probation period, employees accumulate leave to use if their employment continues. The employer also pays superannuation, if they're eligible.
Employers can terminate an employee on probation's contract at any time during this period, without notice, if they feel the arrangement isn't working out. While it is less common, an employee may also leave the company without notice during this period to pursue other career options. If an employee lasts the full probation period, they receive a full-time, part-time or casual employment contract.
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