Nothing Casual about the Victorian Government’s new Sick Pay Guarantee

The Victorian Government confirmed in last week’s State budget that $246 million has been set aside for the pilot Victorian Sick Pay Guarantee, an administrative scheme that provides casual employees and contract workers with a “guarantee” that they will be paid when they need time off sick or to care for loved ones.

Across 2021, the Victorian Government consulted with members of the community, both employers and employees, on the design of a scheme to improve the economic security of Victorian workers prompted by instances of COVID transmission by casual and contract workers continuing to attend work notwithstanding COVID symptoms due to a financial pressure to do so.

The belief was that there had been a ‘choice’ between a day’s pay and a worker’s health (or the health of their loved ones). This belief has now evolved into the creation of a state-run administrative scheme.

Do casuals in Victoria get sick leave now?

Yes. Both casual employees and contract workers now have the opportunity to register to access sick leave payments under the new Victoria Sick Pay Guarantee. It is estimated that around 150,000 workers will be eligible for the first phase of the Guarantee.

The Guarantee is currently operating under a pilot scheme that will last for two years.

It is, in effect, another form of portable leave designed to provide financial security to workers engaging in insecure work across different employers across Australia.

Who will fund the sick leave?

The scheme will be administered by the Victorian Government in an effort to minimise the administrative burden upon employers.

It is, however, difficult to conceive how the Government will verify eligibility without engaging with the employer of an employee or contract worker seeking to access sick pay.

While fully funded by the Victorian Government for the initial pilot, employers will also be expected to contribute levies to fund the scheme moving forward. What these levies will look like remains to be seen.

Which occupations does the Sick Pay Guarantee cover?

The first phase of the Guarantee is open to the following occupations, which the Victorian Government states are “highly insecure”:

  • Hospitality workers
  • Food preparation assistants
  • Food trades workers
  • Sales support workers
  • Sales assistants
  • Aged and disability carers
  • Cleaning and laundry workers
  • Security officers and guards
  • Other labourers in the supermarket and supply chains industries

The full list of workers who are eligible appears on the Victorian Government website.

Workers also need to:

  • Be 15 years of age or over;
  • Be casual employees or self-employed with no other employees (for example, a sole trader operating with an ABN);
  • Not be entitled to paid personal, sick or carer’s leave in any of their jobs (so, for example, a permanent part-time employee with a second casual job would not be entitled to register);
  • Work physically in Victoria (no matter where they live) and have the right to work in Australia; and
  • Work on average at least 7.6 hours per week in an eligible occupation.

It is clear that the Guarantee will cover employees in a range of small businesses, many of whom are dependent upon casual employees and contract workers to respond to the peaks and troughs of workload.

Do workers need to prove they are eligible for the Guarantee?

Yes. Workers must not only meet the extensive eligibility criteria of the Guarantee, but also furnish evidence that to prove that they are eligible.

They will need to show two identity documents (for example, an Australia drivers’ license, passport or birth certificate) although if they are under 18 and only have two forms of ID, they can apply with only one.

They will also need to prove that they are eligible by showing documents to prove that they are either casual employees or self-employed individuals. This may include, for example, their employment contract, a recent payslip, a recent invoice issued by their business or their most recent business activity statement.

Does Victoria’s new sick pay guarantee protect ‘insecure’ workers?

The new Guarantee provides certain casual employees and contract workers with rights to register for a new government scheme with a view to receiving pay when they need time off sick or to care for others.

However, casual employees already had the benefit of the general protections provisions of the Fair Work Act 2009. They could not be subject to adverse action, such as dismissal or reducing shifts, because they suffered an illness or injury, or because they needed to care for a member of their household or immediate family.

The introduction of the Sick Pay Guarantee, therefore, doesn’t create new rights or obligations in this regard. Although it may mean that casual employees may view their right to be absent from work due to illness more strongly.

What does this mean if I hire casual employees or contract workers?

If you hire casual employees or engage contract workers in Victoria, then you will need to take particular note of the new Sick Pay Guarantee.

  • Keep an eye out on the news about the Guarantee and, in particular, who will finance it once the two-year pilot comes to an end.
  • The administrators of the Guarantee may approach you to confirm whether an applicant to the Guarantee is eligible. Take particular care in how you respond to such request for your employees’ information.
  • Human Resources teams should make clear to their casual employees the company’s expectations around absences. It is foreseeable that, in light of the Guarantee, there may arise a perception amongst casual employees that they are not accountable to their employer when they fail to attend work for single day absences.
  • If you haven’t already, review your employment agreements with your casual staff to ensure they are consistent with changes to the law of casual employment that occurred in 2021.

Get in touch with our specialist employment team at Kingston Reid if you have any questions about how the Victoria Sick Pay Guarantee Scheme will affect you and your staff.


Katie Sweatman
+61 3 9958 9605
[email protected]
Lucas Moctezuma
+61 2 9169 8430
[email protected]