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Skilled Group is credited as creating labour hire as a viable business service. Initially, such services provided short-term additional staff for a client's peak periods or other special needs. Since the early '90's however more and more companies have discarded their base employment workforce, or a substantial portion thereof, and utilised labour hire companies to provide their workforce.

Pay and charge rates

An essential component of any labour hire organisation are the two fundamental concepts of pay and charge rates. The pay rate is the per-hour wage paid to the employees. The charge rate is the fee levied on the client to whom labour is provided. Although this sounds very basic, many factors must be considered when calculating these two items.

The following items have a bearing on the determination of pay rates:

• Industrial agreements
• Statutory on-costs (at state and national levels)
• Worker's compensation levies
• Comparable pay rates for employees of the client
• The following items have a bearing on the determination of charge rates:
• Personal protective equipment (PPE) supplied
• Payment terms
• Superannuation
• Payroll tax
• Casual loading
• Gross margin
• Preferred supplier agreements
• Competition

The gross margin is generally calculated as a percentage value of the pay rate. In certain circumstances, it may be calculated as a specific dollar mark-up.

A schedule of rates is typically quoted to the client which includes:

• Charge rate for each hour of ordinary time
• Charge rate for each hour of overtime (typically time and a half, double time, double time and a half)
• Charge rate for applicable allowances which will be paid to the employee in various circumstances (most commonly meal allowance, but also crib allowance, travel allowance, laundry allowance, plus various industry-specific allowances - for example, an additional amount per hour for working with wet/dirty hanging birds in the poultry sector.)

The charge rates for physical hours of time (ordinary plus overtime) are typically quoted for the position at discrete classification increments, for example, level 1, level 2, etc.

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4. No Obligation. There is no obligation to sign up with any of the Labour hire firms that will contact you.
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