Workers’ Rights

The cost of Workers’ Rights

The Cost of Rights – and the Cost of Going Without

A responsible design measures employer cost, public cost and the losses already borne by workers.

No single published Australian costing currently covers the full WeRise workers’ rights package proposed in this dossier. A precise net-cost number would therefore be speculative and should not be presented as settled fact. The policy should be costed by Treasury and the Parliamentary Budget Office once final design choices are made: eligibility, benefit levels, public reimbursement, enforcement staffing, portable-benefit structures and industrial-relations changes all materially affect the result.

The immediate fiscal cost will depend especially on whether paid sick-and-carer leave for casual and dependent workers is employer-funded, government-funded, insurance-funded or shared. Australia already provides 10 days of paid personal/carer’s leave for eligible non-casual employees, while casual employees have no paid personal/carer’s leave entitlement.⁶ Extending a basic floor would create a new cost, but it would also reduce the transfer of illness and caring risk to workers and may limit public-health harms associated with attending work while sick. The size of that offset has not been reliably quantified for Australia in the sources reviewed.

Enforcement is also an investment. In 2024–25, the Fair Work Ombudsman recovered more than $358 million in unpaid wages.⁷ Recovered wages are primarily a transfer back to workers rather than a Commonwealth budget saving, but they demonstrate the social and economic value of compliance activity. Costs should be assessed against the alternative: underpayment, turnover, workplace injury, lower tax compliance, reduced household consumption and public expenditure when insecure incomes fail.

Any public package should be phased, independently evaluated and transparently reported. Gross costs should never be confused with net budget costs; nor should employer compliance costs be confused with a net economic loss when they represent wages or leave previously shifted onto workers.

The strongest objections to Workers’ Rights

Objection 1: Expanded leave and scheduling rights will make employers hire fewer people.

This is a serious risk, particularly in low-margin sectors such as hospitality, retail, social services and small construction. A new entitlement can increase the marginal cost of employment, and poorly designed rules may discourage hiring or lead firms to reduce hours. The evidence reviewed here does not establish a precise Australian employment effect for a universal casual sick-leave guarantee. The response should therefore be design-based rather than dismissive: phase in a modest entitlement, reimburse or insure small businesses, assess impacts independently, and retain clearly defined flexibility for seasonal peaks and genuinely irregular work.

Objection 2: Casual loading already compensates for paid leave.

Casual loading compensates, in part, for foregone leave and job security. But it is paid as ordinary income and cannot guarantee that a worker has money available when illness or caring prevents work. It also does not solve volatile rostering or lack of predictable income. The policy response should avoid treating all casual work as identical: a portable leave scheme could be funded transparently, be proportionate to hours worked, and preserve worker choice where casual work is genuinely preferred.

Objection 3: More regulation will burden small business while major firms absorb the cost.

This is plausible. Complexity can have a disproportionate impact on businesses without payroll departments or industrial-relations advisers. The Fair Work system already contains detailed award structures, and adding poorly integrated obligations could worsen that burden. Reform should therefore include plain-language rules, a single digital compliance interface, free payroll support, safe-harbour provisions for employers that promptly self-correct errors, and differentiated reimbursement for smaller employers. Enforcement should focus strongest sanctions on deliberate, repeat or systemic non-compliance.

Objection 4: Stronger bargaining may raise prices or reduce competitiveness.

Labour-cost increases can flow through to prices, profits, investment decisions or employment. The distribution depends on market structure and productivity, and should not be assumed away. But the alternative also has costs: underpayment shifts costs to workers and compliant firms are undercut by non-compliant competitors. Sectoral bargaining and standards can reduce this “race to the bottom” by creating clearer floors across a sector. Australia should use independent wage, employment and price monitoring where bargaining reforms are introduced.

Objection 5: Employee-like-worker rules may blur genuine entrepreneurship.

Some contractors value autonomy, set their prices, serve multiple clients and operate real businesses. A rights framework should protect them from being reclassified against their interests. The appropriate distinction is not between “employee” and “contractor” as labels, but between genuinely independent businesses and workers who are economically dependent on a platform or principal. Minimum protections should target dependency, control and vulnerability while preserving genuine self-employment.

The evidence base also has limits.

Regulator recoveries measure detected and remedied underpayment, not the full population prevalence. Survey measures of casual work capture self-identification or leave entitlement proxies, depending on the ABS table. International reforms cannot be imported mechanically. Every public claim should therefore specify the measure, year and institution, and final fiscal claims should await formal Australian costing.