When a team member working overseas is sick or takes leave, the entitlement already exists and somebody is already carrying the cost. Either you are, through an employment relationship nobody has named, or an employer of record is, under a contract that says so in writing. The entitlement does not evaporate because it was never written down.
Most Australian founders with a small overseas team have never checked which of those two is true. The arrangement runs. People take days off. Nobody sends an invoice for annual leave, so nobody believes there is a liability sitting there.
Outstaffer sells the second version of that answer, an employer of record that holds the employment and the entitlements, so read the rest knowing where I sit.
The bill for getting leave wrong arrived four years late
On 9 October 2026 the Fair Work Ombudsman announced penalties totalling $478,880 against a Toorak finance broking operation and its manager, imposed by the Federal Circuit and Family Court. Ansa Finance Pty Ltd was penalised $233,100, AFSL Group Pty Ltd $173,160 and the manager $72,620. It was the third time the regulator had taken the same operator to court.
The underpayments behind that figure came to $30,817 across four workers.
Run the division. Every dollar withheld returned $15.54 in penalty, and the total works out at $119,720 a head for work done in 2021 and 2022. The bill landed last Friday. Nothing about the liability shrank while it sat there, and the entitlements inside it were ordinary ones: minimum rates, public holidays, annual leave, personal leave and notice of termination under the Banking, Finance and Insurance Award 2020 and the National Employment Standards.
Judge Janine Young described conduct showing "a cavalier disregard for the integrity of the Fair Work regulatory system".
What happens if my offshore staff member is sick or takes leave?
Three things, in order. The person stops working, which you notice. An entitlement is either paid or quietly not paid, which you may not notice. A record either exists or does not, which is the only part that matters four years later.
Leave is the entitlement that hides the longest
Wages get noticed because they arrive on a cycle and somebody chases them. Leave does not. A fortnight off that was never coded as annual leave looks identical in a bank statement to a fortnight that was, and sick days taken and silently docked look like nothing at all.
So leave turns up in enforcement outcomes bundled with everything else. It can go unpaid for years without a single awkward conversation.
Who is the employer when the work is done overseas?
Whoever directs the work and carries the obligations, not whoever the invoice is addressed to. If you set the hours, run the reviews and approve the days off, the paperwork is describing something other than what is happening. We have written before about which Fair Work obligations actually travel with the work and about whether a public holiday in Sydney is a paid day off in Manila.
Get advice on your own arrangement. This is one judgment, not a ruling about your business.
The counter-argument is better than it looks
Most arrangements like this are never tested, and the base rate of enforcement is low. The Ansa matter was also not a filing error. The regulator described deliberate conduct, two workers dismissed after asking for outstanding entitlements, and notices from a Fair Work inspector ignored. A founder who pays promptly, records the days and gets the odd calculation wrong sits in a different category, and a court treats them that way.
That is the strongest case for doing nothing. It is still a case for leaving an uncosted liability on the books because it probably will not be looked at.
Related reading
Decide the answer before anybody gets sick
Write down who the legal employer is, what leave accrues, at what rate, and where the record lives. If the answer is you, cost it this quarter. If the answer is an employer of record, check the contract actually says so.
If you would rather hand the whole question to somebody who already carries it, sign up and put one role through it.
So here is the real one. When your overseas hire last took a week off, what did your payroll record say had happened?
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