Back in March 2019 we first highlighted that there is change coming for employees who are paid using an annualised salary and covered by certain Modern Awards (check out a list of the affected Awards below).
It’s taken a good few months but late last year the Fair Work Commission (FWC) announced the model clauses that would be added to these Awards; confirming the requirements of employers who have team members covered by them. These changes will come into effect from 1 March 2020, so time is of the essence!
One of the Awards is the Clerks – Private Sector Award, which covers administrative roles (including some marketing, finance, and general admin); so, these changes will impact a LOT of businesses.
If you’re interested in the nitty gritty you can see the full detail from the FWC decision here, otherwise we’ve popped together our wrap up below.
This does differ between Awards but, most commonly employees must be informed what provisions of the Award their salary is intending to cover (e.g., leave loading, overtime rates, allowances, etc), and ensure that their salary is equivalent to, or higher than, what they would be entitled to if they were paid on an hourly basis for completing the same work.
The main concern of the FWC seems to be that there is currently no requirement for any evidence to be collected or provided to the employee that they are not disadvantaged by this arrangement, or any concrete way for employer or employee to know if this is the case.
To ensure there is more transparency in the calculation of annual wages, and that reviews are occurring regularly, the changes require employers to:
Check the list below to see if any of your team members are covered by the Awards that are impacted by the changes (if none of the Awards apply to you, you’re home free – for now!)
Review and update your employment contracts to ensure they include:
Set up appropriate record keeping practices to track the starting, finishing and unpaid break times for any employees affected. This needs to be signed off by the employee each pay period. Depending on what systems or processes you already have in place, this could be as simple as a spreadsheet emailed each pay period, or a time sheet completed in Xero (or other payroll or HRIS software).
Set a reminder for 12 months’ time (and add an item to your end of employment checklist) to make sure you remember to conduct a review of the employee’s working hours across the year and ensure they have been appropriately paid for the hours they have worked.
Please reach out if you have any questions or require any assistance with these changes.
These are the Awards that will have clauses added or updated from 1st March 2020: