Almost one year into its two-year pilot, the Victorian Sick Pay Guarantee scheme has paid out more than one million hours of sick and carer’s leave to casual employees at a cost of more than $22 million. The scheme is currently fully funded by the Victorian Government. 

The Victorian Government claims the scheme has so far been a success and provided a much needed “safety net” to the state’s most vulnerable workers. Evidence from employers suggests that the scheme has reduced the prevalence of workplace illnesses and 41% of surveyed workers who had registered for the scheme said they would have gone to work unwell if not for the scheme. 

However, the future of the scheme is somewhat uncertain.

What is the Victorian Sick Pay Guarantee scheme?

The Victorian Sick Pay Guarantee provides eligible casual and contract workers with a guarantee they will receive sick pay when they cannot attend work. The scheme is aimed at reducing workplace illnesses and keeping businesses “safer and more productive”. 

Victoria is the first state to provide sick and carer’s pay to casual and contract workers. The $246 million two-year pilot program covers an initial cohort of approximately 150,000 workers who do not have access to paid sick leave.

Workers covered by the scheme are eligible for five days a year of paid sick or carers' leave at the national minimum wage. To be eligible for the scheme, workers must:

• be registered for the scheme prior to claiming the payment;

• be 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; and

• not have access to sick and carer’s leave entitlements at any job.

Eligible jobs are:

• aged and disability carers;

• cleaners and laundry workers;

• food preparation assistants;

• food trades workers;

• hospitality workers;

• labourers who work in supermarket supply chains;

• sales support workers;

• sales assistants; and

• security officers and guards.

The scheme is managed, and sick payments distributed, by the Victorian Government. Consequently, employers of casual workers who are covered by the scheme remained unobligated to make any payment for sick and carer’s leave to casual workers directly.

Future of the scheme

When the scheme was announced in November 2020, the Victorian Government said it would fully fund the two-year pilot program, but any future ongoing scheme would be subject to a “modest” industry levy paid by employers. However, the Government has recently indicated that it is still deciding where long-term funding would come from.

In January 2023, Employment Minister Ben Carroll revealed the scheme had so far cost less than anticipated and suggested it was likely businesses would not be taxed to continue funding the scheme beyond the two-year trial phase.   However, unions have been calling for employers to fund the scheme, as they are the primary beneficiaries of a worker not attending work whilst they are unwell and potentially infecting colleagues, customers and clients.  Unions have also been advocating for the scheme to be made permanent and to cover all casual and contract workers who do not have access to paid sick and careers' leave.

Conversely, the Victorian Chamber of Commerce and Industry remains opposed to the Victorian Sick Pay Guarantee scheme in its entirety.  The Chamber says the scheme enables casual workers to “double-dip” as casual pay includes a casual loading in lieu of leave entitlements. 

The Victorian Government has not yet definitively announced whether the scheme will be expanded or made permanent, or whether businesses will be expected to foot the bill through the imposition of a new business levy. The pilot program of the scheme is set to end in June 2024 and an announcement as to its future is expected before this time.  

For more information, please contact:

Jasmine O'Brien
Principal
M +61 401 926 108 | T +61 3 9611 0149
E: jobrien@sladen.com.au                                                                                                            

Katherine Dennis
Principal Lawyer
M +61 407 013 010 | T +61 3 9611 0151
E: kdennis@sladen.com.au