Cashing Out! Can my employee ‘cash out’ their annual leave?
In some cases, yes they can! Until this year, very few employees were able to ‘cash out’ their annual leave entitlements under the Fair Work Act – however recent reforms now allow employees to voluntarily ‘cash in’ or exchange some of their annual leave entitlements for wages.
Thanks to the new reforms, almost all 122 Modern Awards now allow employees to exchange up to two weeks of their annual leave entitlements every year, however there are some requirements that must be met first, namely:
- A maximum of two weeks every 12 months can be ‘cashed in’;
- The employee can only ‘cash out’ annual leave if their annual leave balance still has a minimum of 4 weeks remaining after cashing out and
- A written agreement must be made each time annual leave is cashed out.
The payment for ‘Cashed in’ annual leave should be the same that the employee would be entitled to if they were to take the annual leave.
Not sure how these changes affect your workplace, or how to implement them? Our HR On-Demand Advisors are available on 1300 55 99 62 to provide your business with commercial guidance on Workplace Relations and Human Resources issues such as:
- Applying and understanding leave provisions (personal, parental, carers, annual)
- Understanding and applying employment contracts
- Interpreting and applying award provisions
- Managing (and preventing) unfair dismissal claims
- Taking disciplinary action including delivering formal and informal warnings, and if necessary, terminating employees
- Dealing with Fair Work Commission issues
- Resolving conflicts and issues between employees including claims of bullying, harassment, discrimination and sexual harassment and much more.
Many organisations in Australia are already benefiting from HR On-Demand’s commercially minded HR advice and Employer Template Library – yours can too. Call us on 1300 55 99 62 to get started!