New arrangements for modern award- based, salary employees will apply from 1 March 2020. 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 are significantly more prescriptive than the current clauses, and will require additional administrative tasks. Each of the above awards will, from 1 March 2020 follow the terms of one of two standard ‘annualised payment’/salary clause, plus some specific industry amendments where applicable.
Some of the additional requirements include:
- Requiring 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.
- Reconciling 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 timesheet 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 important and urgent system and process changes. For many salaried employees, completing a daily timesheet may seem burdensome and you may get some pushback. Explaining the requirements have been determined by the Fair Work Commission and must be followed will be an important part of this process change for your award-based, salaried employees.
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.