- Requirement to record a detailed annualised wage and calculation and set outer limits on expected and included overtime and penalties either in writing or in an employment agreement as outlined in the relevant modern award.
- Record employee start and finish times (and unpaid breaks) for each pay period.
- Pay hours exceeding the determined ‘outer limit’ for pay periods in addition to their annualised salary.
- Conduct annual wage reconciliation within 12 months of commencement of the annualised salary (or on termination) and pay any shortfall.
Modern awards containing new annualised salary clauses
- Banking, Finance and Insurance Award 2010
- Broadcasting and Recorded Entertainment Award 2010
- Clerks – Private Sector Award 2010
- Contract Call Centres Award 2010
- Health Professionals Award (for supervisory and management staff) – Commencement date deferred
- Horticultural Award 2010
- Hospitality Industry (General) Award 2010
- Hydrocarbons Industry (Upstream) Award 2010
- Legal Services Award 2010
- Local Government Industry Award 2010
- Manufacturing and Associated Industries and Occupations Award 2010
- Marine Towage Award 2010
- Mining Industry Award 2010
- Oil Refining and Manufacturing Award 2010
- Pastoral Award 2010
- Pharmacy Industry Award 2010
- Rail Industry Award 2010
- Restaurant Award 2010
- Salt Industry Award 2010
- Telecommunications Services Award 2010
- Water Industry Award 2010
- Wool Storage, Sampling and Testing Award 2010
What employers need to do?
Employers who pay annualised wages to employees covered by a relevant modern award should:
- Familiarise themselves with the applicable changes.
- Identify award-based employees and their classifications.
- Create detailed records of how annualised salary arrangements have been calculated for each employee and determined outer limits for overtime and penalties.
- Ensure time records are completed by all relevant staff and pay period comparisons with outer limits are completed by your payroll team.
- Complete annual reconciliations of all applicable annualised salaries, and on termination.
Where an employer does not comply with the new annualised wage clause, and importantly, where the annualised wage is insufficient to compensate for the hours actually worked by an employee, employers will be exposed to the risk of underpayment claims and penalties for award breaches.
There has been an increasing number of underpayment claims and a renewed focus by the Fair Work Ombudsman on pursuing these claims. Even if the new award provisions do not apply to your business, it is a timely reminder to undertake an assessment of your agreements and record-keeping procedures to ensure you are compliant and minimise the risk of being on the receiving end of an underpayment claim.
Where can employers get help?
If you are concerned about how or if these changes will impact your business, or require assistance in preparing your organisation, please reach out to your Prosperity Adviser or direct to our payroll team to discuss the options available to you.