Employers that pay an annual salary to their employees covered by an applicable Modern Award will soon be subject to a number of new notification, record keeping and wage reconciliation obligations. These new Fair Work obligations are aimed at ensuring employees aren’t being disadvantaged by annualised arrangements. The new clauses will only be inserted into Modern Awards which already contain an annualised salary clause.
There are 22 Awards which will be affected by the annualised salary changes. These include;
- Clerks – Private Sector Award 2010
- Banking, Finance and Insurance Award 2010
- Manufacturing and Associated Industries and Occupations Award 2010
- Hospitality Industry (General) Award 2010
- Broadcasting and Recorded Entertainment Award 2010
- Contract Call Centres Award 2010
- Health Professionals and Support Services Award 2010
- Horticulture Award 2010
- Hydrocarbons Industry (Upstream) Award 2010
- Legal Services Award 2010
- Wool Storage, Sampling and Testing Award 2010
- Water Industry Award
- Salt Industry Award 2010
- Telecommunications Services Award 2010
- Local Government Industry Award 2010
- Marine Towage Award 2010
- Mining Industry Award 2010Rail Industry Award 2010
- Restaurant Industry Award 2010
- Oil Refining and Manufacturing Award 2010
- Pastoral Award 2010
- Pharmacy Industry Award 2010
- Rail Industry Award 2010
As of 1 March 2020, employees covered by any of the above Awards and who are on an annualised salary arrangement must now be advised in writing of:
- How the annualised salary has been calculated factoring in any overtime or penalty assumptions used;
- The outer limit number of ordinary hours which would attract penalty rates under the Modern Award; and
- The outer limit number of overtime hours which the employee may be required to work in a roster cycle without receiving any excess payment above the annualised salary.
Employers will also be required to make an additional payment to an employee if they work hours in excess of the outer limits specified in their annualised salary arrangement. Further, employers must also keep a record of starting and finishing times and unpaid breaks taken by the employee. This record must then be signed by employees each roster cycle.
To conclude an already onerous process, every 12 months from the commencement of the annualised salary arrangement, the employer must conduct a reconciliation which calculates if the employee has been better off on the annualised salary compared to the relevant Modern Award. If there has been a loss, this must be paid back to the employee within 14 days.
Again, these changes take effect as of 1 March 2020. Therefore, we recommend that employers start preparing now for the changes so that they are compliant and understand their obligations prior to the deadline.
For more information or assistance with managing your Fair Work obligations call Industryus on 1300 15 10 11 or book a free telephone consultation