On 1 March 2020 the law regarding annualised salary provisions under numerous Modern Awards changed, bringing a host of additional compliance measures for employers.
The changes come at an interesting time with employee wages already a hot topic in the media due to several recent high-profile underpayment cases. The spotlight is certainly on employers and failing to comply with these new requirements will mean that employers can be subject to significant financial penalties.
Which Modern Awards have changed?
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
What are the key changes?
Specific changes are dependent on the award in question, however there are some key changes common to all awards which currently include annualised salary provisions. The changes also affect three awards that have not previously included annualised salary provisions but now have new clauses inserted.
Essentially, the new changes have introduced additional checks and balances aimed at ensuring employees are not underpaid as a result of receiving an annual salary instead of an hourly wage.
1. Employers must specify an outer limit of ordinary hours and overtime hours an employee might be required to work and if the employee works in excess of these hours, the employer is required to pay the employee additional amounts.
2. Employers must keep detailed and accurate records of shift start and finish times, hours worked including ordinary and overtime and unpaid breaks. These records must be signed by the employee each week, pay period or roster cycle (depending on the award).
3. Employers must perform an annual reconciliation of entitlements the employee would have received had they been paid on an hourly basis and reconcile any shortfall when compared with the annual salary paid within 14 days.
These changes have a significant impact on any employers who pay their staff annual salaries under the above listed Modern Awards and the cost of getting this wrong can be significant.
If you are unsure where you stand following these changes, contact Lee Pawlak or Dominic Tonkin from TDP’s Workplace Law team today.
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