How will Victoria’s sick pay expansion affect the workforce?

The expansion of the Victorian Sick Pay Guarantee introduces even more protections to casual workers across the state. While this is a big win for these often-exploited employees, how will these changes affect the wider workforce?

This legislation, introduced in March 2022 made the state the first to offer sick and carer’s pay to casual and contract workers. Now an expansion has been announced, providing further protections for more workers in more industries.

Some new changes include up to 38 hours of sick and carer’s pay for hundreds of workers. The Victorian Government describes the initiative as: “The Victorian Sick Pay Guarantee provides eligible casual and contract workers with a guarantee they will receive sick pay when they can’t go to work. Because no worker should have to choose between a day’s pay and their health – or the health of a loved one.”

The eligibility requirements listed by the government are:

• 15 years or older
• Physically work in Victoria
• Have the right to work in Australia
• Work an average of 7.6 hours per week or more in an eligible job
• Don’t have access to paid sick and carer’s leave entitlements at any job

The three-year pilot program has now been extended for another year, running until 13 March 2025.

While this legislation is certainly a win for casual workers, there are fears that there could be rollover effects on the workforce. Sanam Ahmadzadeh Salmani, legal counsel at Employment Hero says some struggling industries may be hit hard by this introduced compliance.

“This new sick pay initiative is a big win for casual workers, but it doesn’t come without some significant repercussions, it’s multifaceted,” said Ms Ahmadzadeh Salmani.

“Now that the government has expanded the coverage of jobs and industries, this will have a huge impact on some of the industries that were hit the hardest during the pandemic, like SMEs, hospitality, retail, and farming and agriculture businesses.”

Security is the big win that casual workers get out of these laws. No longer do people need to pick their health or providing support to their family.

Ms Ahmadzadeh Salmani continued: “The other side to the argument is that this will provide more security for casual workers, especially when their only choice previously was to either stay home because they are unwell, or go to work because they need to make ends meet.”

While it may seem like employers are drawing the short straw in this situation, Ms Ahmadzadeh Salmani notes that the benefits will be experienced by all.

“Even though it will seem difficult for an employer and the initial reaction will be negative, there are benefits to both employers and employees in this circumstance,” she explained.

“Employers will benefit because it will encourage more employees to work casually. That means less permanent employees which relieves employers of worrying about paying other entitlements, especially if profits are rocky.”

“For SMEs in industries where casual work is quite common, this initiative can continue to promote casual work which often serves as a lifeline to smaller businesses. But all in all, for employees who are likely already feeling the cost of living pinch, this will give them the security to be able to take the day off if they are unwell without having to worry about putting food on the table.”