"If the big guys, with their teams of payroll professionals, can't have it figured out, how do the little guys have any hope?!".
We generally like to keep things light and breezy, but when people's livelihoods and hefty fines are involved there isn't much room for frivolity.
In the wake of the most recent high-profile underpayment situation with Woolworths, it's once again highlighted how difficult Modern Awards are to interpret, and how easily misinterpretation can land a business in trouble!
Here's three tips to implement today to give you a little peace of mind:
Ensure you know which Modern Award, if any, each of the roles in your business are covered under.
Fair Work has a ‘Find My Award’ tool which is handy for generic roles, or you can chat to Fair Work directly to get some help with classifying the roles in your business.
Getting some advice from your friendly IR specialist (like us!) can also get to the bottom of which Award to refer to for each of the roles in your business. We have some more tips on this in our first ever blog.
Sign up to Fair Work updates for these Awards to get notified of any changes (and then read them!)
Again, Fair Work comes through with the goods by having alerts set up for each of the Awards, just subscribe and whenever there is a change to your Award wording they will flag it with you. Much easier than reading the whole thing on the regular!
Review your pay rates and annualised salary calculations against the Awards; and put a reminder in your calendar to do this every EOFY.
Even if you’ve always paid ‘Above Award’ it’s a good idea to have a look at your pay rates against the rates in the Award and ensure that this is still the case, especially if you are including things like annual leave loading or any allowances into your hourly rates. The minimum Award rates generally increase each year, effective from the first pay in July.
Annualised salaries are the area that Woolworths and ABC tripped up, so these are also important to review on a regular basis. Just putting someone on a salary doesn’t mean that the Award no longer applies. Salaried employees are still entitled to the minimum Award entitlements applicable to their role, including pay rates, overtime payments, etc. It is only if they are paid significantly ‘Above Award’ that you can agree to incorporate these entitlements into their overall salary.
Business owners, HR, IR and payroll professionals, and the rest, are calling for changes to employment legislation to simplify and remove ambiguity (yes please!); but until that happens, business owners need to use the tools, and the expertise, at their disposal to make the most informed choices they can!