Australian Employment Laws: An Easy Guide for US-Based Companies

With a stable and resilient economy driven by dynamic and diverse industries, Australia is the country of choice for many US companies looking to expand their teams globally. This guide will walk you through the Australian employment laws you need to know when hiring employees or contractors.

Map of Australia for Australian employment laws post

Vanessa MacRury

Published on July 21, 2022

Australian employment laws: An introduction ⚖️

If you're reading this guide, then you're likely interested in hiring Australian-based employees or contractors – or you're wondering if it's a good idea to do so.This comes as no surprise since Australia is known for:
  • Its strong international ties,
  • A diverse population that speaks English natively,
  • A resilient economy built on dynamic and diversified industries, such as mining, finance, tourism, e-commerce, tech startups, and construction, and
  • A well-developed employment system that looks after both employers and employees.
This guide will focus on the last point above — specifically the critical labor laws you need to know when hiring in Australia.

Basic employment and labor laws in Australia 🖊️

Australia’s employment system is governed by the following legislations:
  • Australian Constitution,
  • Fair Work Act 2009,
  • Industrial Relations Act 1988,
  • Work Health and Safety Act 2011,
  • Various state, territory, and federal laws for the protection of young workers, and
  • Various state, territory, and federal legislation on anti-discrimination.

The Constitution of Australia

While not strictly an employment or labor law, the Constitution of Australia is the bedrock upon which all other relevant legislation is built. Section 51 of Part 5 clearly states that the Australian parliament has the power to create laws impacting the "peace, order, and good government of the Commonwealth," including, but not limited to:
  • Taxation,
  • Pensions,
  • Allowances, and
  • Benefits.

Fair Work Act 2009 (and related legislation)

Arguably the leading Australian employment law employers will have to deal with, the Fair Work Act 2009 governs the relationship between an employer and an employee, including:In addition to this overarching federal law, each Australian state and territory also offers workers protective legislation to keep them safe at work. These vary based on location but include:
  • Occupational health and safety,
  • Workers' compensation,
  • Equal opportunity,
  • Anti-discrimination, and
  • Long service leave.
The Act has seen several significant changes in recent years:You have to consider the Fair Work Act 2009 with the following closely related legislation:The Fair Work employment and labor laws help ensure healthy working relationships are available to Australians and Australian-based workers, granting them the entitlements mentioned in minimum statutory employee benefits under Australian labor law.Note: The Fair Work Act 2009 doesn't have universal applications. For example, it doesn't cover many state public sector and local government employees in South Australia.

Work Health and Safety Act 2011

The Work Health and Safety Act 2011 (WHS 2011) seeks to promote the health, safety, and wellbeing of:
  • Employees,
  • Contractors,
  • Subcontractors,
  • Outworkers,
  • Apprentices and trainees,
  • Work experience students,
  • Volunteers,
  • Employers who perform work, and
  • The general public.
It covers various employer obligations, including:
  • Risks (and how to manage and control them),
  • Incidents (and how to report them),
  • Workers (and how to consult them),
  • Enforcement (via fines and penalties)
It also grants employees the following rights if they suffer a work-related injury or sickness:
  • Worker's compensation,
  • Basic health insurance, and
  • Medical allowance.
The WHS 2011 is enforced, with some modifications, in the following states:

Independent Contractors Act 2006

The Independent Contractors Act 2006 applies to independent contractors and companies who wish to contract their services, safeguarding their rights and articulating their obligations.Note: The line separating employees from independent contractors can sometimes be blurred (South African employers often face similar issues). If you need help determining whether you're hiring an employee or an independent contractor, please look at the Australian Taxation Office (ATO) website.

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State, territory, and federal laws for the protection of young workers

Several state and federal laws protect the rights of young workers in Australia. Perhaps the first thing you need to look at if you're considering hiring or contracting the services of a young worker based in Australia is their age because different states and territories often have strict rules in place to protect them.For example, The Children (Care and Protection) Act 1987 in New South Wales requires workers to be 15 years old before being hired to work in specific industries.Meanwhile, the Australian Capital Territory prohibits the employment of children who are younger than school-leaving age in Chapter 10 of the Children and Young People Act No. 63, 1999.You must get legal advice if you wish to work with young people.

State, territory, and federal anti-discrimination laws

The following four federal laws safeguard Australians against discrimination:Alongside these federal laws are state- and territory-specific anti-discrimination laws that also seek to protect employees against all forms of discrimination based on protected attributes such as:
  • Age,
  • Disability,
  • Employment,
  • Race,
  • Religion,
  • Sex (including pregnancy and breastfeeding),
  • Intersex status,
  • Gender identity, and
  • Sexual orientation.

Australian employment conditions: Minimum statutory employee benefits under Australian labor law 📝

Australia's key employment and labor laws seek to create a safe working environment for workers and grant them the following basic entitlements:
  • Four weeks of paid annual leave each year,
  • Working hours capped at 38 hours per week,
  • Parental leave (a combination of paid and unpaid),
  • Superannuation, and
  • Healthcare.
For more in-depth information on leave entitlements for Australian-based workers, check out our Leave Policy in Australia guide.

Annual leave

In Australia, employees benefit from four weeks of paid annual leave (pro-rated for part-time employees and increased to five weeks for shift workers). This is separate from public holidays.Annual leave accrues based on the number of hours they work in a year. In other words, employees start at zero and have to wait for their leaves to accumulate before they can take them.

Personal leave

Another benefit Australian workers get is personal leave, which covers both sick leave and carer's leave. Employees are entitled to:
  • 10 days each year for full-time employees, and
  • pro rata 10 days each year for part-time employees.

Parental leave

An employee is eligible for parental leave if they:
  • Give birth,
  • Are the spouse or partner of someone who gives birth, or
  • Adopt a child aged 16 or less
Parental leave grants your employees 52 weeks of unpaid parental leave, provided they were:
  • Employed by you for the last 12 months, and
  • The primary caregiver.
They could also be entitled to 18 weeks of paid parental leave if they:
  • Are the primary carer of a newborn or newly adopted child,
  • Have earned less than $151,350 in the last financial year,
  • Are not intending to do any paid work while receiving the Paid Parental Leave payment, and
  • Be able to meet the criteria of different income, employment, and residency tests.
Parental leave is an umbrella term that covers the following paid and unpaid leaves specific to parents, regardless of gender:
  • Maternity leave
  • Paternity and partner leave
  • Pre-adoption leave
  • Adoption leave
  • Special maternity leave
  • No safe job leave
All these leaves are governed at the federal level, with minor variations at the state and territory levels.

Pre-adoption leave

Unpaid pre-adoption leave refers to two days granted to employees who may have to attend interviews or examinations that will allow them to adopt a child.

Special maternity leave

Unpaid special maternity leave is granted to employees who have:
  • A pregnancy-related illness,
  • A miscarriage, or
  • A termination.
If an employee experiences a stillbirth, they may be able to apply for unpaid parental leave or compassionate leave.

No safe job leave

Employees are entitled to a safe working environment in Australia. In cases where they cannot do their job safely (e.g., because they have a sensitive pregnancy), they can take paid no safe job leave for the period their job is unsafe.

Australian Superannuation (Retirement Pension)

Your Australian employees are likely entitled to superannuation, as guaranteed by the Superannuation Guarantee Charge Act 1992 and Superannuation Guarantee (Administration) Act 1992.This mandatory contribution ensures that 10.5% of employees' ordinary earnings are set aside for their pension.

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You won't have to provide private health insurance for your employees because Australia has a government-funded national healthcare system. That said, many employers do offer this as a benefit.

More benefits

In addition to the benefits mentioned above, Australian workers also enjoy the following:
  • Flexible working hours and arrangements for qualified employees,
  • Protection against such things as discrimination, harassment, and unlawful dismissal,
  • Compensation (when applicable), and
  • A national minimum wage for services rendered regardless of role and responsibilities.

Scope of employment regulation 📋

As you can see, Australian employment laws are comprehensive and cover a variety of scenarios at the federal, state, and territory levels. However, there are a few exclusions depending on whether an employee is a foreign national or an Australian citizen.

Do Australian labor laws apply to foreign nationals?

If a foreign national is resident in Australia and this is also their primary place of work, then Australian employment laws apply. This is regardless of whether their employer is based in Australia or overseas.However, if a foreign national is not resident in Australia or is in Australia but isn't an employee, then these labor laws do not apply for the duration of their stay.

Do Australian labor laws apply to Australian nationals?

These labor laws apply if an Australian national is resident and primarily working in Australia.On the other hand, if an Australian national lives abroad and is not contracted to work for an Australian company, then Australian employment laws do not apply.

Forms of Employment: Categories of Worker 👩‍⚕️

In Australia, employees get different entitlements based on their employment classification. This is why you must inform any prospective employee in writing about their status before they start working with you.The following worker categories are recognized by the government:


Full-time employees are often employed on either a permanent basis or on a fixed-term contract. They usually work an average of 38 hours each week.


Unlike full-time employees, part-timers work less than 38 hours a week.Like full-time employees, they're also often employed permanently or are on a fixed-term contract.


According to the Fair Work Act 2009, a casual employee is offered and accepts a job that "does not include a firm advance commitment that the work will continue indefinitely with an agreed pattern of work."


Contractors are sometimes called independent contractors, sub-contractors, or subbies and work for themselves rather than employers. They're often hired to complete a specific task or for a set period.

Labor hire or agency workers

A labor hire worker enters into an employment contract with a labor hire agency to meet (often) temporary business needs.


Permanent employment is arguably the most stable relationship between employer and employee. There is no set end date (i.e., employment is ongoing), hours are often full-time, and the employee enjoys the full benefit of Australian labor laws.


Unlike permanent employees, those who have signed a fixed-term employment contract work for:
  • A specified period (e.g., for only 10 months) and/or
  • A particular task (e.g., only to hire and create a new team of experts).
Fixed-term contract employees can work either full-time or part-time.

Shift workers

Shift workers work shifts, which use the full 24 hours of a given day (i.e., not confined to the usual 9-5). Shifts can cover up to six or even seven days of the week.Shift workers can be full-time or part-time employees and/or be classed as permanent, fixed-term, or casual.They get an extra payment for working shift hours.

Daily hire and weekly hire

In Australia, it's possible to hire people on a daily or weekly basis in the plumbing and building and construction industries (e.g., plumber apprentices who must be employed as full-time weekly hire employees).Both daily hire and weekly hire employees can work full-time or part-time and often enjoy the same benefits as other types of employees.That said, daily hire employees enjoy the following additional entitlements:
  • they are entitled to get or give 1 day's notice to end their employment,
  • a tradesperson will be allowed 1 hour before termination to collect, clean, sharpen and transport their tools, and
  • they receive a follow the job loading.


Newly recruited employees in Australia are often subject to probation periods, a trial period at the start of employment that allows both employer and employee to gauge company fit and/or role suitability.

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Apprentices and trainees

Apprentices and trainees go through formal on-the-job training, combining work with the opportunity to study for a qualification in a trade or occupation.Like many other types of employment, apprentices can work full-time or part-time. They cannot, however, be done on a casual basis.


Outworkers can be contractors or employees working from home or at a place not customarily considered business premises.

Employees with disability

This classification refers to employees with a recognized disability, as per the Disability Discrimination Act 1992.

Background Checks 🕵️

It is common for an employer in Australia to require background checks from all prospective employees, which allow employers to assess whether a candidate meets the requirements of a position. Background checks can include:
  • Skills, qualifications, and experience verification,
  • Criminal background checks,
  • Financial background checks,
  • Reference checks,
  • Identity verification,
  • Work rights checks, and
  • Employment medical assessment.
Because background checks require companies to collect, store, use and disclose the personal information of prospective and current employees, they are legally regulated. This means that a company cannot just ask for any background check. According to Zegal, "Background checks of your candidates are generally allowed if they are directly relevant to the role and the applicant consents to the check."According to the Australian Privacy Principles Guidelines, this consent is also necessary if you wish to disclose background checks to relevant third parties.

Regulation of the Employment Relationship 📄

The implementation of Australian employment laws relies on a few things, such as:
  • The written employment contract, and
  • Any terms implied by law.

Written Employment Contracts

A written employment contract isn't a legal requirement, although it's common practice to have one in place before work starts. A contract protects both parties from risk brought about by misunderstandings and/or disputes.

Implied Terms

Where a contract exists between employer and employee, and employment arrangements are unclear (e.g., duration of the notice period), the Australian government turns to implied terms.Terms implied by law include an:
  • Employee's duty of obedience and co-operation, and
  • Employer's duty to provide a safe working environment.

Workers' compensation system 💰

In Australia, workers are entitled to a mandatory minimum wage and, sometimes, to a discretionary performance-based bonus scheme.

National Minimum Wage

The minimum wage refers to the lowest amount you can pay an employee. This is reviewed every year and put in place to safeguard employees against exploitation.As of July 2022, the national minimum wage in Australia is $21.38 per hour or $812.60 per every 38-hour week.


Sometimes, companies give eligible employees performance bonuses. Even though this isn't a statutory requirement, it's essential that your policy is clear to minimize the risk of misunderstanding.

Hours of work ⏳

In Australia, the standard working week is capped at 38 hours per week. While an employee can work longer, this often depends on a number of factors, such as:
  • The employer and the employee reaching an agreement on whether the extra hours are reasonable and/or
  • The availability of overtime pay (and/or equivalent benefits, such as time off in lieu of pay).

Rest Breaks 😴

Modern awards and enterprise agreements define the following:
  • Rest breaks during working hours (commonly, 20 minutes for a rest break and 30 minutes for a meal break),
  • Rest breaks in between working hours (typically, eight to ten hours), and
  • Rest breaks for shift workers (varies based on specific industry).

Holiday Entitlement 🏖️

As mentioned above, full-time employees are entitled to four weeks of paid annual leave per year. In addition, they can also take the following paid public holidays (and additional state- and territory-specific holidays):
  • New Year's Day
  • Australia Day
  • Good Friday
  • Easter Monday
  • Anzac Day
  • Labor Day
  • Queen's Birthday
  • Christmas Day
  • Boxing Day

Flexible Working 💻

In Australia, a full-time or part-time employee who has worked for 12 months with the same employer can request a change in their working arrangements if they:
  • Have parental/care responsibilities of a school-aged child.
  • Are a carer.
  • Have a disability.
  • Are over 55 years of age.
  • Are experiencing family violence.
They will need to make the request in writing, and the employer must respond similarly. Although the right to make such a request is protected by law, there is no statutory requirement to approve it. An employer can refuse the request on reasonable business grounds.

Illness and Injury of Employees 💊

In Australia, qualified employees are entitled to paid and unpaid time off if they get sick or suffer an injury.

Legal Disclaimer:

The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.

Termination of Employment 🚫

If you need to terminate an employee, the following sections will apply:
  • Notice periods,
  • Dismissal, and
  • Redundancy.

Notice Periods

The minimum statutory notice period in Australia is between one and four weeks. This increases to five weeks if your employee is older than 45 years old and has completed at least two years of service.Alternatively, and if expressly permitted by the employment contract, you can provide a payment in lieu of giving notice. This is called a severance payment.Minimum notice periods do not apply to the following:
  • Casual employees,
  • Temporary employees, and
  • Employees who are terminated because of serious misconduct (e.g., theft, fraud, and assault).


Dismissal must comply with:
  • The law (at the federal, state, and territory levels),
  • The employment contract, and
  • Any relevant internal policy requirements.
If any employee were to be dismissed unfairly, they would be entitled to remedies that could include reinstatement and compensation. On the other hand, the employer would likely be found guilty of breaching the general employee protection laws and may incur penalties and remedial orders.

Protected employees

Federal and state laws prohibit the termination of employment for discriminatory reasons, which include:1. Exercising, or not exercising, a workplace right. Workplace rights include:
  • Making complaints or inquiries to the employer or an external body;
  • The ability to initiate legal proceedings;
  • Rights and benefits under employment and industrial relations legislation or modern awards and enterprise agreements.
2. Protected attributes include:
  • Race;
  • Sex;
  • Disability or impairment;
  • Temporary absence due to illness or injury;
  • Family or carer's responsibilities (these vary from state to state).

Redundancy or Layoffs

Redundancy (also sometimes called layoff) happens when a permanent employee is terminated because:
  • The position is no longer needed, and/or
  • The employer becomes insolvent or bankrupt.

Redundancy/Layoff Pay

Qualified employees who are made redundant are entitled to the minimum notice period and redundancy pay.

Collective Redundancies

If an employer lets 15 or more employees go, they will need to notify Services Australia, who will then support both employer and employee through the process.

Frequently Asked Questions (FAQ) about Australian employment laws❓❓❓

This section contains a few questions about Australia and its employment system.

Does Australia have labor laws?


What are the laws that protect employees in Australia?

In addition to the laws mentioned above, the following may be considered relevant legislation for all companies looking to hire Australia-based employees:
  • Corporations Act 2001
  • Independent Contractors Act 2006
  • Freedom of Information Act 1982
  • Privacy Act 1988
  • Competition and Consumer Act 2010

What are the five basic employer rights in Australia?

In Australia, employers enjoy the following basic rights:
  1. The right to contest the compensability of a claim,
  2. The right to demand hard work,
  3. The right to protect your trade secrets,
  4. The right to demand your workers act in your best interests, and
  5. The right to quality conscientious work
For more information on what these rights mean for you, take a look at the Five Rights of Employers.

What are the 3 major rights of an employee in Australia?

Just like employers, employees also have basic rights. The Occupational Health and Safety Act grants each employee the following:
  1. The right to know about health and safety matters.
  2. The right to participate in decisions that could affect their health and safety.
  3. The right to refuse work that could affect their health and safety and that of others.

Pilot ensures compliance with Australian employment law. 📋

At Pilot, we help US-based businesses hire in Australia to ensure compliance with Australian employment law. We provide expert advice. If you'd like to receive further information, please do not hesitate to contact us.

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