New Changes will take effect 1 March 2020.
A Fair Work Decision has finalised the terms of three new standard annualised salary arrangement clauses. The changes will affect around 20 Modern Awards and is aimed at reducing “wage theft” and non compliance with awards.
KEY TAKE OUTS:
- Employers need to update employment contracts and HR practices by 1 March 2020 to comply with the new modern award changes.
Currently, we have Modern Awards whereby employers pay “all inclusive” annualised salary under the Award to compensated for overtime rates, penalty rates and loading.
The new compliance requirements are:-
- Employers must advise employees in writing and keep records of:
- How it has been calculated and breaking it down into separate components ie overtime or penalty.
- The outer limit of ordinary hours would attract penalty rates;
- The outer limit of overtime hours that an employee is required to work without receiving excess payment above the annualised salary.
- Employers are required to make additional payments to employees if they work hours in excess of the outer limits;
- Employers must keep records of start and finishing times and unpaid breaks taken by employees. The record must be signed by the employees each pay period or roster cycle.
- Every 12 months the employer must conduct a reconciliation to calculate whether the employee has been better off on the annualised salary compared to the Modern Award. If there is a shortfall the employer has 14 days to repay it.
Some of the Awards below are highly likely to require amendments to employment contracts and adjustments in payroll and HR practices.
- 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 2010
- Hydrocarbons Industry (Upstream) Award 2010
- Horticulture Award
- Hospitality Industry (General) Award 2010
- Legal Services Award 2010
- Local Government Industry Award 2010
- Marine Towage Award 2010
- Manufacturing and Associated Industries and Occupations Award 2010
- Mining Industry Award 2010
- Oil Refining and Manufacturing Award 2010
- Pastoral Award 2010
- Pharmacy Industry Award 2010
- Rail Industry Award 2010
- Restaurant Industry Award 2010
- Salt Industry Award 2010
- Telecommunications Services Award 2010
- Water Industry Award 2010
- Wool Storage, Sampling and Testing Award 2010
Most employers employ clerical and administrative employees. Therefore, given that the Clerks – Private Sector Award 2010 is one of the awards affected, many employers will need to get the correct legal advice.
What if your employees are on a Contract of Employment?
Employers can still have a set of clause within the Contract. But there are specific requirements that employers must follow in drafting a ‘set off’ provisions that complies with employment laws.
Why the change?
The new award obligations introduced by the Fair Work Commission are aimed at ensuring employees are compensated for the work they perform by ensuring annual remuneration received is adequately calculated and monitored to capture the full range of monetary benefits applicable under modern awards for the particular work performed.
Step one for Employers
Before 1 March 2020 employers should:-
- Identify which modern awards will apply to the changes;
- Identify which employees are affected by the changes and ensure any annualised salary is consistent with the new terms of the Modern Awards;
- Identify and rectify any deficiencies; and
- Review all contracts and HR Policies to ensure compliance.
ABOUT KARENA NICHOLLS:
Karena is a partner at Coutts Lawyers & Conveyancers and heads up the injury compensation and employment law teams. She is passionate and dedicated to helping her clients understand their rights and obligations and advising them on the best course of action to achieve their desired outcomes. It is her practical and client-orientated approach which has attributed to her authentic reputation positioning her as a highly regarded compensation and employment lawyer.
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This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.