Back in February 2019, the Fair Work Commission (FWC) released a decision regarding significant changes for modern awards with salary provisions. The FWC has not yet released a date for when these changes will come into force, or whether transitional arrangements will apply. If your business employs salaried staff through any of the listed awards below, you need to be prepared for these upcoming changes.
Modern awards to be impacted by this decision:
- Banking, Finance and Insurance Award 2010
- Broadcasting and Recorded Entertainment Award 2010
- Clerks – Private Sector Award 2010
- Contract Call Centres Award 2010
- Health Professionals and Support Services Award 2010
- Horticulture Award 2010
- Hospitality Industry General Award
- 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 Industry Award 2010
- Salt Industry Award 2010
- Telecommunications Services Award 2010
- Water Industry Award 2010
- Wool Storage, Sampling and Testing Award 2010
The changes to the salary obligations under each award will vary into one of two new clauses, plus some specific industry amendments.
In particular, the decision includes the following:
- Require employers to complete a documented annual calculation of the entitlements the salaried employee would have received, should they have been employed on an hourly rate.
- Reconcile any shortfall in this comparison, to be paid to the employee within 14 days.
- In order to calculate this comparison, the employer is required to keep time sheet records, as if the employee was working on an hourly rate. This record will have to be signed off by the employee each week (or other variation depending on the award).
- Document an ‘outer limit’ of hours the employee could possibly work under the terms of the salary, i.e. 10 hours overtime per week, or 12 hours on a weekend shift, for example. Any time worked over this outer limit would need to be paid to the employee as an additional amount.
- Annualised wage arrangements (salary agreements), where entered into by agreement, should be terminable at any time by agreement or terminated on 12 months’ notice.
Even if this decision does not impact the agreed pay rate for your salaried employees, the requirements for record keeping and annual calculations for comparison need system and process changes.
We will keep you up to date with news regarding commencement dates. For now, keep these changes in mind and consider how your processes may need to improve to manage these new requirements. If you’re concerned about how to implement these changes, talk to our team ASAP.
*This is general information only and doesn’t take your specific business circumstances into account.