Annualised Salary Provisions in Modern Awards Has Changed: How These Changes Affect You As an Employer or Employee
Fair Work Commission is required to do a 4 yearly review of all modern awards. These reviews result in big changes in awards that affect both employers and employees. Back in February 2020, wording and format of some awards were updated. If you haven’t done yet, check the 31 updated awards through the FWC website.
Taking effect from 1 March 2020, FWC also made some amendments to the annualised salary provisions of 22 modern awards. 19 of these modern awards already included annualised salary clauses but annualised salary clauses will be inserted in 3 additional awards for the first time.
The new requirements for record-keeping, notification, and reconciliation took effect on 1 March 2020. You can find the full list below, but some of the modern awards that are affected are the Hospitality Industry (General) Awards, Banking, Finance & Insurance Award, Restaurant Industry Award, and Local Government Industry Award.
What’s Changing in Annualised Salary Clauses?
According to the new requirements, employers need to:
Meep more detailed records of their employees, including start, finish and break times. Records for the hours worked have to also include unpaid rest breaks and overtime.
Notify their employees in writing of the annualised salary payable to them. The notification must also include the method of salary calculation, and provisions factored in it. They should also include the outer limit of ordinary hours and overtime employees might be required to work without additional entitlement for pay.
Pay their employees for any overtime work, hours that exceed the outer limited specified, separately.
Conduct annual reconciliation to ensure the employees are paid correctly according to the relevant modern award. If there are any discrepancies, employers are required to pay their employees within 14 days. The employers are also required to do a reconciliation upon the termination of the contract.
Must give a written 12 months notice if they want to terminate an annualized salary arrangement under some certain awards. If employees want to terminate the arrangement, they need to give the notice in the same period.
Please keep in mind that these only apply to full-time employees.
Why These Changes Were Introduced?
Even though these changes add some new responsibilities on the shoulders of employers, they are aimed at solving a huge problem; stopping employers from underpaying their staff using annualised salaries. With these new changes, employers must keep the records and pay their employees for their additional work.
What Employees Should Do Now?
As an employer, if you do not want to breach a modern award or face underpayment claims you need to make proper changes in your system to meet the new requirements. Here at Sensible Solutions, we’ve already updated the way our partners operate under the new changes in modern awards. You can contact us to book a free consultation session to see how these changes are going to affect you and what you should do to avoid penalties.
We also briefly put together what employers should do:
Check the awards and employees affected
Find out what changes need to be made
Introduce a calculation method for annualised wage
Notify your employees on the changes and new requirements
Introduce a system to track employee time and attendance to meet the requirements
Confirm the attendance with employees
Pay your employees for hours exceeded “outer limits”
Conduct annual wage reconciliations
Modern Awards Impacted by the Changes in Annualised Salary Arrangements
Banking, Finance and Insurance Award 2010
Broadcasting, Recorded Entertainment and Cinemas Award 2010
Clerks—Private Sector Award 2010
Contract Call Centres Award 2010
Horticulture Award 2010
Hospitality Industry (General) Award 2010
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 Do You Think?
Let us know what you think of these new changes. Was it easy for you to change your system to comply with the new regulations? Is keeping track of the start, end, and break times of employees going to affect your work culture in a negative way? What do you think as an employee?
Need Professional Assistance? Book a Free Consultation
Contact Sensible Solutions and talk to one of our experts to see how the new changes affect you and what needs to be done. Call (04) 2709 8710 or fill in the form below to get in touch with us.