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  • 80-hour threshold for employees

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    Your employee will satisfy the 80-hour threshold if, in their 28-day reference period, the total of the following is 80 hours or more:

    • actual hours they worked
    • hours they were on paid leave
    • hours they were paid for absence on a public holiday.

    If your eligible employee satisfies the 80-hour threshold, you can claim the tier 1 (higher) payment rate for them. If they do not meet the 80-hour threshold, you can only claim the tier 2 (lower) payment rate for them.

    If you have incomplete records of your eligible employee’s total hours, there are some circumstances where we will allow you to claim the tier 1 payment rate for them.

    See also:

    A full-time employee who has been employed for their full 28-day reference period will usually satisfy the 80-hour threshold.

    Closer examination may be required for eligible employees that are:

    If your employee has been stood down, an alternative reference period may apply to them.

    Actual hours worked

    Actual hours worked means the actual hours of work performed by your eligible employee in their employment with you. This may be different than your employees’ contracted hours, ordinary hours or the hours they have been paid for.

    For example, any overtime performed by your employee in the course of their employment in their 28-day reference period will count towards the 80-hour threshold. It is the actual hours of overtime performed that count (that is, if a penalty rate loading applies, it does not increase the number of hours counted).

    Paid leave

    Hours of paid leave means the actual hours of leave:

    • taken by your eligible employee in the 28-day reference period, and
    • paid for in their employment with you.

    This includes (but is not limited to) the following types of paid leave:

    • personal or carer's leave
    • annual leave
    • long service leave
    • employer-paid parental leave
    • other miscellaneous leave.

    It does not matter if your eligible employee takes their leave at full pay or half pay, or through a purchased leave arrangement. You still count the total number of hours covered by the leave taken. For example, if your employee takes 8 hours of annual leave at half pay, you count 8 hours towards their 80-hour threshold, not 4 hours.

    Unpaid leave is not counted towards the 80-hour threshold. However, if an employee takes unpaid leave, an alternative reference period may apply.

    Paid public holiday absence

    When an eligible employee is paid for an absence from their employment with you on a public holiday during their 28-day reference period, you count the number of hours they were paid for that day.

    For more information about leave and public holiday rules and record keeping requirements, visit the Fair Work OmbudsmanExternal Link.

    28-day reference period

    There are different options for the 28-day reference period that you must use to test whether your employee satisfies the 80-hour threshold.

    Your 28-day reference period or periods are based on when your pay cycle ends and therefore won’t be the same for all employers or employees.

    Use either:

    • the pre-March period which is the 28 days which finish on the last day of the last pay cycle that ended before 1 March 2020, or
    • the pre-July period which is the 28 days which finish on the last day of the last pay cycle that ended before 1 July 2020.

    Your pay cycle for an employee may not be the same as the period between the dates you actually pay them. For example, the amount you pay an employee each Friday may be for the hours they worked in a week ended on the previous Wednesday. In this case your employee's pay cycle is the week ended on Wednesday.

    Your employee only needs to satisfy the 80-hour threshold in one of the 28-day reference periods. If they satisfy it in one reference period, you do not need to determine if they satisfy it in other reference periods.

    If your pay cycle is longer than 28 days for your employees (for example monthly), you will need to perform a pro-rata calculation.

    If you have a monthly pay cycle for your employees, your employees will meet the 80-hour threshold if their hours worked, hours of paid leave and hours of paid absence on public holidays are at least the following:

    Pay cycle days or hours

    Days in monthly pay cycle

    Hours in monthly pay cycle

    29

    82.86

    30

    85.72

    31

    88.58

     

    Example 1 – Determining the reference period

    Callum runs a business and has 10 employees.

    The business has a fortnightly pay cycle, which ends every second Wednesday.

    In February 2020, the pay cycles for Callum's business ended on the 5th and the 19th.

    The pre-March period for Callum's employees is the 28 consecutive days ended on 19 February, being the 23rd of January to the 19th of February.

    In June 2020, the pay cycles for Callum's business ended on the 10th and 24th.

    The pre-July period for Callum's employees is the 28 consecutive days ended on 24 June. The reference period is the 28th of May to the 24th of June.

    If any of his employees do not meet the 80-hour threshold for the pre-March or pre-July periods, Callum should consider whether an alternative reference period applies to those employees.

    End of example

     

    Example 2 – A monthly pay cycle

    Kalindah runs a business and has 12 employees. The business has a monthly pay cycle, which ends on last day of each month. The most recent pay cycle that ended before 1 March was the pay cycle ended 29 February. The 29 February pay cycle covered the period 1 February to 29 February 2020, being 29 days. The most recent pay cycle for Kalindah's business that ended before 1 July ended on 30 June and covered a period of 30 days.

    Kalindah establishes the total hours for each of her employees during the two pay cycles and adjusts the result by multiplying the total hours by (28 ÷ number of days in the cycle), to pro-rata a 28-day reference period.

    Jedda worked 142.5 hours in Kalindah's business during the pay cycle ended 29 February 2020. He was also entitled to 7.5 hours for public holidays and took 15 hours of paid leave. His total hours for the pay cycle was 165. Jedda's pro-rata hours for the pre-March period was 165 × 28 ÷ 29 = 159 hours.

    During the pay cycle ended 30 June 2020, Jedda worked 75 hours and was entitled to 7.5 hours for public holidays. Jedda took no paid leave during this pay cycle. His total hours were 82.5 and his pro-rata hours for the pre-July period was 82.5 × 28 ÷ 30 = 77 hours.

    Kalindah nominates Jedda for the higher rate based on the 159 hours calculated in the pre-March period.

    End of example

    Alternative reference period

    There may be circumstances where the pre-March or the pre-July reference periods are not suitable for some of your eligible employees.

    If your employee does not satisfy the 80-hour threshold in the standard pre-March or pre-July reference periods, you should consider whether they satisfy it using an alternative reference period.

    Alternative reference period – less than 80 hours and not representative

    Use the less than 80 hours alternative reference period if your eligible employee’s:

    • total hours of work, paid leave and paid absences on public holidays was less than 80 hours in the pre-March or the pre-July reference period, and
    • when compared to earlier 28-day periods, the pre-March or the pre-July reference period is not representative of that eligible employee’s total number of hours in a similar 28-day period.

    For example, your eligible employee has taken unpaid personal leave during the pre-March or pre-July reference period and this is not representative of their typical hours.

    The alternative reference period is the 28-day period:

    • ending at the end of the most recent pay cycle for the employee for you before 1 March 2020 or 1 July 2020
    • in which the employee’s total number of hours of work, paid leave and paid absence on public holidays was representative of a typical 28-day period.

    Example 3 – Less than 80-hours and not representative

    Barista café employs Kobe and he typically works 30 hours a week. He was a permanent employee of Barista café at 1 July 2020, but not at 1 March 2020.

    Barista café pays Kobe every second Tuesday for the hours he worked in the fortnight that ended on the previous Friday. As Kobe was employed before 1 July 2020 but not before 1 March 2020, Barista café should use the pre-July reference period to work out if Kobe meets the 80-hour threshold. The pre-July reference period is from 30 May 2020 to 26 June 2020 as that is the 28 days which finish on the last pay cycle that ended before 1 July 2020.

    However, during that pre-July reference period, Kobe had to care for his ill daughter from 6 June 2020 to 19 June 2020. He was unable to attend work and was not entitled to any leave for that period.

    Barista café works out that Kobe worked 60 hours from 30 May 2020 to 26 June 2020. That is, Kobe’s total hours of work, paid leave and paid absences on public holidays was less than 80 hours in the pre-July reference period. This means Kobe has met the first condition for the 80-hours alternative reference period to apply.

    Kobe typically worked 30 hours a week in earlier periods (giving 120 hours in a 28 day period), so the 60 hours Kobe worked in the pre-July reference period was not representative of his total hours of work, paid leave and paid absences on public holidays in a similar 28 day period. This means Kobe has met the second condition for the 80 hours alternative reference period to apply.

    The alternative reference period for Kobe will be the period from 2 May 2020 to 29 May 2020. This period is used because it represents a typical 28-day period for Kobe’s total hours of work, paid leave and paid absences on public holidays ending at the end of the most recent pay cycle for Kobe before 1 July 2020.

    Kobe satisfies the 80-hour threshold because in the period from 2 May 2020 to 29 May 2020, the total of the following was 80 hours or more:

    • actual hours Kobe worked
    • hours Kobe was on paid leave
    • hours Kobe was paid for absence on a public holiday.
    End of example

    Alternative reference period – employed part-way through the reference period

    This applies if your eligible employee was not employed by you during all or part of the pre-March or pre-July reference period.

    The alternative reference period is the first 28-day period ending on or after 1 March 2020 or 1 July 2020 that wholly occurs during:

    • consecutive pay cycles, or
    • a pay cycle of the employee.

    If the employee was stood down in that first 28-day period, then use the first 28-day period starting on the first day of a pay cycle on or after the reference time in which they were not stood down.

    Example 4 – Employed part-way through the reference period

    Cleaning Co hired Ernie to work for 25 hours per week on 12 June 2020 as a permanent employee.

    Cleaning Co pays Ernie every Monday for his work in the week that ended on the previous Thursday. As Ernie was employed before 1 July 2020 Cleaning Co should use the pre-July reference period to work out if Ernie meets the 80-hour threshold. The pre-July reference period is from 29 May 2020 to 25 June 2020 as that is the 28 days which finish on the last pay cycle that ended before 1 July 2020.

    However, Ernie was not employed by Cleaning Co during all the pre-July reference period. This means Ernie has met the condition for this alternative reference period to apply.

    The alternative reference period for Ernie will be the period from 12 June 2020 to 9 July 2020. This period is used because it is the first 28-day period ending on or after 1 July 2020 which consists of consecutive pay cycles for Ernie.

    Ernie satisfies the 80-hour threshold because in the period from 12 June 2020 to 9 July 2020, the total of the following was 80 hours or more:

    • actual hours Ernie worked
    • hours Ernie was on paid leave
    • hours Ernie was paid for absence on a public holiday.
    End of example

    Alternative reference period – first pay cycle ends on or after 1 March or 1 July

    This applies if the start of your eligible employee’s employment was on or before 1 March or 1 July 2020 but their first pay cycle ended on or after 1 March or 1 July 2020.

    The alternative reference period is the first 28-day period ending on or after 1 March 2020 or 1 July 2020 that wholly occurs during:

    • consecutive pay cycles, or
    • a pay cycle of the employee.

    If the employee was stood down in that first 28-day period, then use the first 28-day period starting on the first day of a pay cycle on or after the reference time in which they were not stood down).

    Example 5 – First pay cycle ends on or after 1 March or 1 July

    Earthworks Pty Ltd (Earthworks) hired Malcolm as a full-time permanent employee on 29 June 2020.

    They pay Malcolm every second Monday for his work in the week that ended on the previous Friday.

    As Malcolm was employed with Earthworks on 1 July 2020 and his first pay cycle ends on 10 July 2020 (which is after 1 July 2020), he meets the condition for this alternative reference period to apply.

    The alternative reference period for Malcolm will be the period from 27 June 2020 to 24 July 2020. This period is used because it is the first 28-day period ending on or after 1 July 2020 which consists of consecutive pay cycles for Malcolm.

    Malcolm satisfies the 80-hour threshold because, in the period from 27 June 2020 to 24 July 2020, the total of the following was 80 hours or more:

    • actual hours Malcolm worked
    • hours Malcolm was on paid leave
    • hours Malcolm was paid for absence on a public holiday.
    End of example

    Alternative reference period – businesses that change hands or changes within a wholly-owned group

    Under the rule that applies for businesses that changed hands, your employee is treated as having been employed by you in the pre-March or pre-July reference period even though you began employing them at a later date.

    This rule can also apply for employment changes within a wholly-owned group. However, the rule is only relevant if you are eligible for the JobKeeper scheme in your own right and your employee meets other eligibility requirements.

    The alternative reference period is the first 28-day period ending on or after 1 March 2020 or 1 July 2020 that wholly occurs during:

    • consecutive pay cycles for the later employer, or
    • a pay cycle of the employee for the later employer.

    If the employee was stood down in that first 28-day period, then use the first 28-day period starting on the first day of a pay cycle on or after the reference time in which they were not stood down.

    Records

    Where you consider the 80-hour threshold is satisfied, you should use the most accurate workplace records to show the actual hours your eligible employees worked in their 28-day reference period. You can use your employment records (for example, payroll data or timesheets) to help you determine whether your employees satisfy the 80-hour threshold.

    Example 6 – Part-time employee working over 80 hours

    Yarran works 2 days a week in a law firm. He sometimes needs to work extra days when the firm is busy. He has a time off in lieu (TOIL) agreement with his boss that he will record his extra hours and take paid TOIL at a later time to make up for the extra days.

    Yarran’s 28-day reference period is the 28 days ending on 27 February 2020. In those 28 days the law firm was very busy and Yarran recorded a total of 128 hours of work. Yarran’s employer includes his actual recorded hours for the period and determines that he has exceeded the 80-hour threshold.

    End of example

     

    Example 7 – Payroll data

    Jamie is a long-term casual employee at a café. He is usually rostered on for two shifts a week but sometimes he does three shifts in a week.

    In the pre-March reference period, Jamie was rostered on, and worked for a total of 60 hours which he was paid for. Because he only worked 60 hours, Jamie has not satisfied the 80-hour threshold for the pre-March reference period.

    In the pre-July reference period, Jamie was rostered on for 90 hours, however, he did not work for two of his shifts. He only worked for, and was paid for, a total of 75 hours.

    To determine whether Jamie meets the 80-hour threshold for the pre-July reference period, Jamie’s employer should refer to his payroll data, rather than his roster. Because he only worked and was paid for 75 hours Jamie has also not satisfied the 80-hour threshold for the pre-July reference period.

    End of example

    If you do not have records

    If you do not have records of your employees’ hours worked in a reference period, or your records are incomplete, we may apply the higher rate to employees in specified circumstances.

    This may help you if your records have been lost or destroyed, or if you were not obliged to keep records of the hours your employee worked. This can include where you pay an employee on a basis other than hours worked, such as commissions or piecework. We will publish more information once it is available.

    See also:

    Last modified: 25 Sep 2020QC 63696