The casual employment rules that apply in 2026 come from changes that commenced on 26 August 2024. A person is a casual only if, when they start, there is no firm advance commitment to ongoing work and they are entitled to a casual loading or casual pay rate, and that assessment looks at how the relationship actually runs in practice, not only at what was agreed on day one. Employers must give every new casual a Casual Employment Information Statement before or as soon as possible after they start, and then again at set intervals: after 12 months for small business employers, and after 6 and 12 months and every 12 months thereafter for everyone else. Casuals can notify you in writing that they want to change to permanent employment through the employee choice pathway, and you must consult and respond in writing within 21 days. Getting the classification or the paperwork wrong exposes you to underpayment claims and civil penalties.
There is a storeperson we have known for four years. Same four shifts a week, same site, same forklift. By any ordinary use of the word, he has a job.
Ask him about going permanent and he laughs at you. He likes the loading. He likes being able to knock back a Friday when his kid has something on. He has said no to a permanent offer twice, in writing, cheerfully.
His employer still has to give him a Casual Employment Information Statement at six months, at twelve months, and every twelve months after that, for as long as he stays. Whether he wants to convert has nothing to do with it.
That gap, between what the law was designed to fix and what actually happens on the floor, is where most employers get caught. So let us deal with both.
What changed, and when did it take effect?
The changes came through the Closing Loopholes amendments to the Fair Work Act and commenced on 26 August 2024. Three things matter for employers:
- A new statutory definition of “casual employee.”
- A new pathway to permanent employment, the employee choice pathway, replacing the old casual conversion rules.
- New obligations around the Casual Employment Information Statement, including when it has to be reissued.
There were also transitional arrangements, and they have run their course. The pre-August-2024 conversion pathways stayed available to some employers and their existing casual employees until 26 February 2025 for non-small-business employers, and until 26 August 2025 for small business employers. Both windows have closed. In 2026 there is one pathway, and it is employee choice.
If you have a policy document that still refers to “regular casual employees” and employer offers of conversion, it is out of date. So is anything you downloaded in 2023.
Who is a casual employee now?
Under the current definition, a person is a casual if, when they start employment:
- the employment relationship has no firm advance commitment to ongoing work, taking a number of factors into account, and
- they are entitled to a casual loading or a specific casual pay rate under an award, registered agreement or employment contract.
Both limbs. Paying the loading on its own does not make someone a casual, which surprises people more often than it should.
What “no firm advance commitment” actually means
This is assessed on the real substance, practical reality and true nature of the relationship, not just what the contract says. Write whatever you like in the contract; the question is what the two of you actually do.
The Fair Work Ombudsman sets out factors that must be considered, including whether:
- the employer can offer or not offer work, and whether that is what actually happens
- the employee can accept or reject work, and whether that is what actually happens
- it is reasonably likely there will be future work of the kind the employee usually performs
- there are full-time or part-time employees doing the same kind of work in the business
- the employee works a regular pattern, even one that changes over time
The list is not exhaustive, not all factors need to be satisfied, and no single factor decides it.
The bit most employers miss: this is not only about day one
The definition is anchored to the start of employment, and that wording trips people up. It does not mean the assessment stops there.
When working out whether there is a firm advance commitment, you can look at the contract on its own, or at the contract together with any mutual understanding or expectation between employer and employee that is not written into it. And that mutual understanding is worked out from how the contract is actually performed, and what the two parties do after entering into it.
In plain terms: the conduct of the relationship across its whole life is evidence, not just the paperwork signed on day one. A contract that says “no guaranteed hours” counts for very little if, three years in, the roster has never varied, no shift has ever been declined, and both sides plainly expect next Tuesday to look like last Tuesday.
Straight up
The test we apply on the phone is not “what does the contract say”. It is: over the last twelve months, could you have offered him no work, and did you ever actually not offer him any? Has he ever knocked one back? If the honest answer is that the roster has run like clockwork and nobody has ever tested it, you are relying on a piece of paper. A piece of paper is the weakest evidence in this entire assessment.
Does a regular roster make someone permanent?
No. Not on its own. The Fair Work Ombudsman is explicit that a regular pattern of work by itself does not establish a firm advance commitment, and someone on a regular pattern can still be a genuine casual.
Read that carefully though, because it is a statement about one factor in isolation. It is not a safe harbour. A long, unbroken, highly predictable pattern is exactly the evidence that builds a mutual expectation, and mutual expectation is precisely what the assessment is looking for.
Which is why our four-year storeperson is a genuinely interesting case rather than a comfortable one. He is a casual because the arrangement really does operate that way: he knocks shifts back, the employer varies the roster, and neither side treats next week as guaranteed. Change any one of those things and the picture changes with it.
Where the risk actually sits
Misclassification is where the money is lost. If someone you engaged as a casual is found not to meet the definition, you may be liable for the paid leave, notice and redundancy entitlements they should have received. The loading you have been paying does not automatically cancel that out.
Review any casual who has worked a fixed, unchanging roster for a long stretch, or who is doing the same work as your part-time staff on the same shifts. That is your audit population, and it is usually smaller than people fear and never quite zero.
Where the real driver is genuinely fluctuating demand, engaging through labour hire, temporary recruitment or contingent staffing is often a cleaner structure than stretching a casual engagement past the point where it still looks casual.
Nobody actually wants to convert, and it does not matter
Time for the part we would say on the phone.
The employee choice pathway was built on a premise: that there is a meaningful population of workers trapped in casual employment against their will, doing permanent jobs on casual terms, wanting security and unable to get it.
In more than two decades of placing people into warehouses, factories and distribution centres across Sydney, we have met remarkably few of them.
What we meet constantly is the opposite. People who choose casual on purpose. They like the flexibility. They like being able to say no to a shift without a conversation about leave. They like working across three different sites in a month because it is more interesting than one. And, above all else, they like the money. A 25% loading is not a technicality to someone doing twelve-hour shifts. It is a real number that turns up in a real bank account every week, and plenty of people have run the maths and decided they would rather have it than four weeks of leave they were not going to take anyway.
Offer conversion to a room full of long-term casual employees (who often refer to themselves as casuals) and watch what happens. In our experience most of them ask what it does to their hourly rate, hear the answer, and politely decline.
What actually happens
An employer, doing the right thing, sits down with a four-year casual and offers permanency. The employee asks two questions. What happens to my loading, and can I still knock back a shift. Then they say no thanks, and everyone goes back to work slightly confused about what the legislation was for.
To be fair to the other side of it: misclassification is real, it has been found by courts, and there are workers who genuinely were doing permanent jobs on casual terms with no ability to refuse anything. The law exists because of those cases, and if you have seen one you will read the paragraphs above differently. Both things can be true at once.
But here is the part that matters commercially, and it is the whole reason this section is in a compliance article rather than an opinion column:
Whether your casuals want to convert has absolutely no bearing on your obligations.
You still have to issue the statement, on schedule, forever. You still have to respond in writing within 21 days to a notice you were not expecting. You still have to classify correctly. The Fair Work Act does not have a clause that says “unless everyone is happy”.
We have never seen an employer penalised because a casual wanted to go permanent and was refused. We have seen plenty of employers exposed because the paperwork was never issued. The risk in this legislation was never really about conversion. It is about administration, and administration is the bit everyone forgets precisely because nobody is complaining.
What is the Casual Employment Information Statement?
The Casual Employment Information Statement (CEIS) is a document published by the Fair Work Ombudsman that employers must give to casual employees. It is separate from, and in addition to, the Fair Work Information Statement (FWIS) that every new employee receives.
The CEIS explains:
- the definition of a casual employee
- how casual employment can be changed, including when an employee can notify you of their intention to change to permanent employment
- the reasons an employer may decline such a notice
- the role of the Fair Work Commission in resolving disputes
You must issue the version in place at the time you have to issue it. The FWO updates it. Do not keep a saved 2024 PDF in your onboarding pack and assume it is still current, because that is exactly what most businesses are doing right now.
When must you give it? This is the bit everyone misses.
It is not a one-off. It recurs, forever.
Employer type | When the CEIS must be given |
All employers | Before, or as soon as possible after, the casual employee starts |
Small business employer (fewer than 15 employees) | Again after 12 months of employment |
All other employers | Again after 6 months and 12 months, then after every 12 months |
Counting your employees. A small business employer has fewer than 15 employees at the relevant time. Include employees of associated entities. Casual employees are not counted unless they are engaged on a regular and systematic basis. Cross 15 and the six-month obligation kicks in.
Straight up
If you take one thing from this article, take this. The recurring issue is the one we see missed most often, and it is missed for the most human reason imaginable: nothing prompts it. Nobody asks for it, nothing breaks when it does not happen, and no system reminds you. Put it in your HRIS today with a recurring task. It will take you ten minutes and it removes the single most common breach we encounter.
How to give it
In person, by post, by email, by emailing a link to the FWO’s CEIS page, by emailing a link to a copy on your intranet, or another reasonable method.
Whichever you pick, record that you did it and when. In a dispute the question is whether you can issue an evidence. A calendar note is not evidence. A sent email is.
The employee choice pathway: what to do when a notice lands
Rare, in our experience. But when it happens, the clock is real.
Who can give a notice
A casual can give notice if they:
- have been employed for at least 6 months (12 months if employed by a small business employer), and
- believe they no longer meet the requirements of the casual employee definition
Employment before 26 August 2024 is not counted when assessing eligibility.
They cannot give a notice if they are in an ongoing dispute with you about changing to permanent under this pathway, or if in the previous 6 months you refused a previous notice or a dispute about employee choice was resolved under a dispute resolution process.
What you must do
Step 1. Consult. Before responding, you must consult with the employee. That covers what would change: full-time or part-time, hours of work, and when the change takes effect.
Step 2. Respond in writing within 21 days. The clock starts the day the notice is given. Accept or decline, in writing.
Step 3a. If you accept, the response must state the new employment status, the employee’s new hours, and when the change takes effect. It takes effect from the first day of their first full pay period starting after your response, unless you both agree otherwise.
Step 3b. If you decline, the response must give reasons, and the reasons can only be:
- the employee still meets the definition of a casual employee
- there are fair and reasonable operational grounds, meaning substantial changes would be needed to how work is organised, there would be significant impacts on the business, or substantial changes to the employee’s conditions would be needed to comply with an award or agreement
- accepting would mean not complying with a recruitment or selection process required by law
“It doesn’t suit us” is not on the list. Neither is cost on its own. We have watched a manager write exactly that in an email and have to walk it back a week later.
For the mechanics from the employee’s side, including eligibility examples, see casual conversion rules in Australia.
What you must not do
You cannot reduce or vary hours, change a work pattern, or terminate employment to avoid these obligations. Casual employees are also protected from adverse action for exercising the workplace right to give a notice, receive a response, or participate in a dispute about it.
Sham arrangements
It is unlawful to knowingly make a false statement to persuade a current or former full-time or part-time employee to enter a casual contract for the same or substantially the same work. It is also unlawful to dismiss or threaten to dismiss someone in order to re-engage them as a casual doing the same or substantially the same work.
Courts can impose civil penalties on businesses and on individuals. This one is not a paperwork risk.
Your 2026 casual employee compliance checklist
- Audit your casual employee population. Anyone on a fixed, unchanging roster over a long period, or doing the same work as part-time staff on the same shifts. That is your list.
- Confirm every casual employee is entitled to a casual loading or casual pay rate under an award, agreement or contract. Without it, they are not a casual employee under the definition.
- Check your casual contracts reflect the current definition, not pre-2024 language about “regular casual employees” and employer conversion offers.
- Fix your onboarding pack. Both the CEIS and the FWIS to every new casual employee, before or as soon as possible after they start.
- Build the recurring CEIS reminders into your HR system. 6 and 12 months then annually, or 12 months if you are a small business employer. This is the one that gets missed.
- Always issue the current version from the FWO site. Never a stored PDF.
- Record every issue with a date and method.
- Create an employee choice response process with a named owner, a consultation step, and a tracked 21-day deadline.
- Train your managers that only three grounds permit a refusal, and none of them is “no”.
- Recheck your small business status if headcount is near 15, including associated entities and regular and systematic casuals.
- Diarise a six-month review. The FWO updates its guidance and the statement itself.
Two calendar reminders and one named person
If you are a small employer with a handful of casual employees and no HR system, do these two things this week and you have removed most of your exposure:
Set a recurring calendar reminder for the CEIS. Six months, twelve months, annually. Or twelve months only if you are under 15 staff. Ten minutes of work, and it is the breach we see more than any other.
Name one person as the owner of a 21-day response. Not “HR”. A person. The clock does not care that your HR manager was on leave when the notice arrived.
And the wider point. The debate about whether casual employees want permanency is a genuinely interesting one, and we come down firmly on the side that most of the people we place are exactly where they want to be. But it is a debate about the intent of the law, not about your obligations under it. Your obligations are administrative, recurring, unprompted, and enforced regardless of how happy everyone is.
Our four-year storeperson is on his ninth Casual Employment Information Statement. He has never read one of them. His employer has issued every single one, on time, and has the emails to prove it.
That is the whole job.
**This article is general information only and is not legal advice. Casual employee entitlements and obligations depend on your award, enterprise agreement, contract and circumstances, and the law changes. All statements were verified against fairwork.gov.au on 7 August 2026. Impact HR Group is a recruitment agency, not a legal practice, so check current requirements at fairwork.gov.au or seek independent advice before acting.
Frequently asked questions
What changed for casual employment in 2026?
The current rules stem from changes that commenced on 26 August 2024: a new statutory definition of casual employee, the employee choice pathway replacing casual conversion, and recurring obligations to issue the Casual Employment Information Statement. The transitional arrangements that preserved the old conversion pathways closed on 26 February 2025 for most employers and 26 August 2025 for small business employers, so in 2026 the employee choice pathway is the only route.
When do I have to give the Casual Employment Information Statement?
Every new casual must receive it before, or as soon as possible after, they start. It must then be reissued after 12 months if you are a small business employer with fewer than 15 employees, or after 6 months, 12 months, and every 12 months thereafter for all other employers.
What is a small business employer for the CEIS rules?
An employer with fewer than 15 employees at the relevant time. Employees of associated entities are counted. Casual employees are not counted unless engaged on a regular and systematic basis.
How long do I have to respond to an employee choice notice?
You must consult with the employee and then respond in writing within 21 days of the employee giving you the notice.
Can I refuse a casual employee's request to become permanent?
Only on the grounds set out in the legislation: the employee still meets the definition of a casual employee; there are fair and reasonable operational grounds; or accepting would mean failing to comply with a recruitment or selection process required by law. You must give your reasons in writing.
Does a casual employee on a regular roster automatically become permanent?
No. A regular pattern of work on its own does not mean there is a firm advance commitment to ongoing work, so an employee working regular shifts can still be a casual. But the assessment is not limited to what was agreed at the start. It can also take into account any mutual understanding or expectation between the parties, worked out from how the contract is actually performed and what both sides do after entering into it. A long, unbroken and highly predictable pattern is strong evidence pointing the other way, and it is exactly the population employers should audit.
What if my casual employees do not want to become permanent?
That is common, and many casual employees prefer the flexibility and the 25% loading. It makes no difference to your obligations. You must still issue the Casual Employment Information Statement on schedule, classify correctly, and respond in writing within 21 days if a notice is ever given. The compliance requirements apply regardless of whether anyone wishes to convert.
What are the penalties for getting casual employee classification wrong?
If a person engaged as a casual employee does not meet the definition, you may be liable for the paid leave, notice and redundancy entitlements they should have received. Sham casual arrangements attract civil penalties against both businesses and individuals.
