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The People in Dairy Engagement & Reward
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Family members

State and federal industrial laws all contain different definitions of what constitutes a family member. All of the definitions include parents, spouses, children and siblings and some include grandparents of the employee or employee's spouse.

Formal arrangements for employment of family members

There is no legal requirement to have a formal employment arrangement for a family member. However, it is strongly recommended that you are both aware of the various expectations and the rewards and that these are written down. You may want to refer to the section on employees for some ideas on how you might approach this.

If you are employing a family member and the federal industrial laws apply to your business, then as a minimum you must abide by the National Employment Standards.
 
If you are employing a family member, you must also comply with federal laws about taxation and superannuation and state laws about workers compensation.

Employment of children
Tip The laws about the employment of children vary from state to state. These laws deal with issues such as the age at which children are permitted to work, the types of work they can perform and the hours they can work.

For a summary of the law for your state,visit the State industrial Laws page and click on the tab for your state.

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Remuneration and benefits for family members

This group of farm employees is often neglected when it comes to remuneration. Particularly important are the young adults who either leave school to work on the farm, or come back home after time away in the work force or studying. Often they work on the farm to help out parents who want to step back from the business.

In many situations, these people are not paid a commercial wage for their efforts. It is very easy for several years to go by with only the payment of a living allowance and no opportunity for the family member to build up assets. In some cases, there is an assumption that the person will inherit the farm if he or she stays on, and therefore little is done about trying to put a commercial value on the labour. This leaves the door open for potential conflict amongst siblings when succession of business ownership is addressed down the track. 

Treat the input of family members in a commercial manner
Tip
Always treat the input of family members in a commercial manner, even if it requires some transfer of assets over time to family employees in substitution for wages not paid.
Farm Scenario

Barry and Linda were beef farmers who purchased a dairy farm as part of a project to offer the family an opportunity to be involved in a family farming business. Their eldest son, Terry, was just completing a diploma in agriculture. He was keen to get into farming and was enthusiastic to work hard to get the farm business going.

The first few years were going to be tough for cash flow because the family had to build a new dairy and add infrastructure.

Terry was very committed to the farm and dedicated all his time to getting the business going. The farm adviser and accountant discussed his input and put a commercial value to it after board and keep at around $70,000.

The family agreed to pay $20,000 of this to Terry in wages and each year to adjust the balance sheet, in favour of Terry, by the remaining $50,000, less the tax that would have been payable. This arrangement gave Terry money to live on as well as accumulating an asset in recognition of his contribution.

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