Penalty Rates for Casual Workers

01

The Common Misconception

One of the most widespread myths in Australian horticulture is that casual workers are not entitled to penalty rates. Many growers — and even some labour hire companies — believe that the 25% casual loading “covers everything,” including nights, overtime, and public holidays. This is wrong.

The 25% Casual Loading Is Not a Catch-All

The casual loading compensates for the lack of paid leave entitlements (annual leave, personal leave, etc.). It does not replace or absorb penalty rates, night shift loadings, or overtime entitlements.

The Horticulture Award Is Clear

The Horticulture Award 2020 explicitly provides for penalty rates that apply to all employees — including casuals. Night shift loading, overtime, and public holiday rates are separate entitlements that sit on top of the casual loading.

Getting It Wrong Is Costly

Underpaying casual workers by failing to apply penalty rates is a contravention of the Fair Work Act. It exposes both the labour hire company and the host employer to significant penalties, back-pay claims, and reputational damage.

02

Night Shift Loading (Clause 13.2(d))

Any ordinary hour worked between 8:31pm and 4:59am attracts a 15% loading on the base hourly rate. This is in addition to the 25% casual loading. It applies every single night — there is no exemption for casual workers.

15% Loading on Top of Casual Loading

The night shift loading is calculated on the ordinary base rate and is added on top of the 25% casual loading. Both loadings apply simultaneously.

Applies Every Night, No Exceptions

There is no minimum number of nights, no qualifying period, and no opt-out. If a casual worker works ordinary hours in the 8:31pm–4:59am window, the 15% loading must be paid.

Example: Level 2 Casual Working 9pm–5am

Base rate: $24.95/hr. With 25% casual loading: $31.19/hr. With additional 15% night loading: $34.93/hr. Paying only $31.19/hr is an underpayment of $3.74 per hour — every single night shift.

03

Overtime (Clause 13.2(f) & Schedule B.3.2)

Casual employees are entitled to overtime rates. When overtime is triggered, casuals receive 175% of the ordinary hourly rate (not 175% of their casual rate). Overtime applies in two situations.

More Than 12 Hours Per Engagement/Day

When a casual worker works more than 12 ordinary hours in a single engagement or day, all hours beyond 12 are paid at the overtime rate of 175% of the ordinary hourly rate.

More Than 304 Ordinary Hours in an 8-Week Period

When a casual worker exceeds 304 ordinary hours over an 8-week period (equivalent to an average of 38 hours per week), all hours beyond 304 attract overtime rates.

Cannot Be Avoided by Splitting Engagements

The 8-week/304-hour threshold is cumulative. Structuring rosters to avoid daily overtime does not eliminate the 8-week overtime obligation. Hours must be tracked across the full period.

04

Public Holiday Rates (Schedule B.3.1)

All casual employees who work on a public holiday are entitled to 225% of the ordinary hourly rate. This is one of the most commonly missed entitlements in horticulture.

225% of Ordinary Hourly Rate

A Level 2 casual worker on a public holiday earns $56.14/hr (225% of $24.95). This is not optional and cannot be traded away or offset against the casual loading.

Applies to All Public Holidays

This includes all national and state/territory public holidays. If workers are on-site on a public holiday, the 225% rate applies from the first hour.

Common Error: Paying Casual Rate Instead

Some operators pay the standard casual rate ($31.19/hr for Level 2) on public holidays. This underpays the worker by $24.95 per hour — a serious contravention.

05

Span of Ordinary Hours (Clause 13.2(b))

The Horticulture Award sets a clear span of ordinary hours. Work outside this span automatically triggers penalty loadings — and this cannot be contracted out of.

Ordinary Hours: 5:00am – 8:30pm

Ordinary hours for all employees (including casuals) can only be worked between 5:00am and 8:30pm on any day except public holidays. Hours outside this span attract additional loadings.

Outside This Span: Night Loading Applies Automatically

Any ordinary hours worked before 5:00am or after 8:30pm automatically attract the 15% night shift loading. There is no discretion — the loading is triggered by the clock, not by agreement.

Cannot Be Contracted Out Of

A worker cannot “agree” to waive night loading or work outside ordinary hours without penalty. Any such arrangement is void and unenforceable. The Award is the minimum — it cannot be undercut by consent.

06

Award Allowances That Also Apply

In addition to penalty rates, casual workers are entitled to a range of allowances under the Horticulture Award. Some of these are “all-purpose” allowances, meaning they feed into the calculation of all penalty rates and loadings.

Leading Hand Allowance (All-Purpose)

Casual workers performing leading hand duties are entitled to the Leading Hand allowance. Because it is an all-purpose allowance, it increases the base rate used for calculating overtime, night loading, and public holiday rates.

First Aid Allowance (All-Purpose)

A casual worker appointed as a first aid officer is entitled to the First Aid allowance. Like the Leading Hand allowance, this is all-purpose and flows through to all penalty calculations.

Wet Work Allowance

Workers required to work in wet conditions (e.g., rain, irrigation, dew-laden crops) are entitled to a Wet Work allowance for the time spent working in those conditions.

Meal Allowance for Overtime

When a casual worker is required to work overtime and was not given prior notice, they are entitled to a meal allowance. This is frequently overlooked in horticulture operations.

07

Minimum Engagement & Accessorial Liability

Two final points that growers and labour hire companies must be aware of when engaging casual workers.

Minimum Engagement: 2 Hours Per Occasion (Clause 11.3)

Every time a casual worker is engaged, they must be paid for a minimum of 2 hours — even if the actual work takes less time. Sending a worker home after 30 minutes still requires payment for 2 hours at the applicable rate.

Accessorial Liability for Both Parties

Failure to pay correct penalty rates is a contravention of the Fair Work Act. Under accessorial liability provisions, both the labour hire company and the host employer can be held liable for underpayments — even if the host employer did not directly employ the worker.

Ignorance Is Not a Defence

Claiming you “didn’t know” casuals were entitled to penalty rates does not protect you. The Fair Work Ombudsman expects all parties in the supply chain to understand and comply with Award obligations.

08

Casual Penalty Rate Comparison Table

The table below shows the correct casual rates across all penalty categories for Levels 1–4 under the Horticulture Award. These figures demonstrate that casual penalty rates are significantly higher than the standard casual rate.

Classification	Base Rate	Casual Ordinary 125%	Night Shift 125% + 15%	Overtime 175%	Public Holiday 225%
Level 1	$24.73	$30.91	$34.62	$43.28	$55.64
Level 2	$24.95	$31.19	$34.93	$43.66	$56.14
Level 3	$25.54	$31.93	$35.76	$44.70	$57.47
Level 4	$26.77	$33.46	$37.48	$46.85	$60.23

Rates are based on the current Horticulture Award. Night Shift rate = base + 25% casual loading + 15% night loading. Overtime and Public Holiday rates are percentages of the ordinary (base) hourly rate as specified in Schedule B.

Not Sure If You’re Paying Correct Penalty Rates?

Getting casual penalty rates wrong is one of the most common — and most expensive — compliance failures in horticulture. We can audit your current pay practices and help you get it right before the Fair Work Ombudsman does.

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