Amidst the global COVID-19 pandemic there was some key legislation that was introduced on the 1 st of March to selected Modern Awards.
All Employers, Directors, CEOs and HR Managers who are responsible for payroll and employee entitlements.
On the 1st of March 2020 ‘Annualised Wage Arrangements were introduced into selected awards.
Ensure you understand the obligations and the options in complying with the new legislation.
‘Wage theft’ has been a hot topic over the last 12 months with a lot of media coverage and recent public examples including Woolworths, Made Establishment run by George Calombaris and Super Retail Group self-reporting or being caught out underpaying employees in annualised salaries.
These cases coupled with a review by the Fair Work Commission have made changes to several awards including the Banking, Finance and Insurance Award 2020. These changes aim to provide a stronger ‘safety net’ for employees who are paid an annualised wage by ensuring they are better off compared to entitlements they would otherwise have received under the modern award.
The new obligations require employers to:
1. Notify employees in writing of the award provisions that have been satisfied as part of their annualised wage arrangement.
2. Provide written advice outlining the basis of the calculation of their annualised wage, including the ‘outer limits’ (e.g. overtime) of extra hours the employee may work over a pay cycle.
3. Pay employees for any hours worked more than the identified outer limits.
4. Keep records of employees’ start and finish times (including unpaid breaks) and ensure the records are acknowledged by the employees for each pay period
5. Conduct an annual reconciliation to calculate what the employee would have been paid under the Modern Award and compare that against the amount the employee was actually paid. Where there is a shortfall, the employer is required to pay the outstanding amount within 14 days of the reconciliation.
You should seek professional advice on what options would best suit your business. Options that may be available include:
The consequences of failing to comply with the new legislation exposes a company to penalties of up to $63,000 and an individual employer or person involved in the contravention penalties of up to $12,600 per breach.
Partnering 4 People PerformanceParthena Morgan is the Director for Partnering 4 People Performance and specialises in employee and industrial relations. If you need advice and support in understanding these changes and implementing them in your business, please contact Parthena for a confidential discussion on 0488 147 676 or firstname.lastname@example.org. This article was produced with the intention to provide general information and does not constitute legal advice.