Contractors, Temporary and Part-Time Casual Workers: What’s the Difference?

What are part-time casual workers?

You may be asking yourself: part-time vs casual work – is there a difference? In fact, permanent staff can be employed on either a full-time or part-time basis, depending on whether or not they work more than 38 hours per week. Casual workers, on the other hand, almost always work on a part-time basis. The Fair Work Ombudsman defines a casual worker as someone who:

• is offered a job,
• does not have any firm advance commitment that the work will continue indefinitely, and
• accepts the offer knowing that there is no firm prospect of becoming an employee.

Furthermore, casual workers usually work irregular hours, are not entitled to any paid sick leave and can be laid off without notice. However, although they are paid for the actual number of hours worked, they are normally entitled to a loading of typically 25% to compensate them for not receiving the same benefits as permanent employees. Important: As an employer, you are required to provide your casual staff with the Casual Employment Information Statement (CEIS) once every 12 months, either in person, by mail, email, fax or another method. The CEIS contains information about:

• the definition of a casual employee,
• when an employer has to offer casual conversion,
• when an employer doesn’t have to offer casual conversion,
• when a casual employee can request casual conversion,
• casual conversion entitlements of casual employees employed by small business employers, and
• the role of the Fair Work Commission in dealing with disputes about casual conversion.

Casual part-time work is very much subject to seasonal fluctuation. Some industries, in particular the retail and hospitality sectors, experience a significant rise in staffing requirements during different seasons like the Christmas period. During these busy times, they are likely to hire a large number of casual staff to support their business requirements. Note that casual staff are employed by you directly, whereas temporary workers are employed by a staffing provider, such as a recruitment agency, who supplies your company with the necessary staff as needed.

Pros for employers:

• helps manage seasonal fluctuations
• no notice period

Cons for employers:

• 25% loading
• availability not guaranteed

What are temporary workers?

Temporary workers (or temps) are normally hired by a staffing provider and are under their management. This means a third-party company is responsible for their recruitment, payment and performance. For businesses, it can be very convenient to use an agency to provide temporary staff during busy periods or to scale their team for a major project without needing to go through the whole recruitment process themselves. What’s more, the temporary workers don’t enter into any direct agreement with the companies to which they are deployed, removing the administrative burden for organisations. Temporary work engagements are usually fixed-term deployments that can run from a few weeks to several months or even years. Often, these workers cover for employees on maternity leave or other temporary absences.

Pros for employers:

• guaranteed cover for temporary staff absences
• convenient: less admin, saves time

Cons for employers:

• no direct management
• minimal input as to who is sent

What are contractors?

Contractors are hired by an enterprise to perform specific duties or jobs. According to the Independent Contractors Act 2006, a contractor does not necessarily need to be a natural person. This means that companies, partnerships and even trusts can act as contractors in addition to individuals. A company typically enters into a legal agreement with a contractor that specifies which services are to be performed and the agreed remuneration.

Here are some key differences that set contractors apart from employees:

• Unlike employees, contractors have the freedom to choose their own working hours.
• They also have control over their working methods and tools.
• Contractors need to have their own insurance cover as they are responsible for any defects or liability issues.
• Contractors have no annual leave entitlement.
• Unlike employees, contractors are hired on a project basis and are not guaranteed a permanent flow of work.
• Contractors have to manage their own superannuation payments.

Fair Work provides useful information for engaging with contractors. They recommend that companies follow these five steps:

1. Know the pay and conditions that apply.
2. Ask potential contractors about their workplace practices.
3. Check the contract price to make sure it’s enough to cover wages.
4. Set clear expectations.
5. Make sure you know of any subcontracting arrangements.

Be sure that you understand all the costs and risks involved before hiring a contractor for your project.

Pros for employers:

• defects covered by contractor’s insurance
• covered by legal agreement

Cons for employers:

• minimal or no control over working methods and time
• reliability and quality not guaranteed

Related: How to Find Good Employees

Casual or part time, contractor or temp – as an employer, you need to be aware of your options and the implications of each engagement type. All of these options can give you a great deal of flexibility, but you’ll have a different relationship with your workers in each case. Refer back to his article whenever you are unsure which choice is most suitable in your circumstances. No matter whether you end up looking for a temporary or part-time casual employee or even a contractor, our 10 Recruiting Strategies for Hiring Great Employees will help you find the best applicants for your requirements!