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The Fair Work Commission has turned its focus to the disparate ‘annualised salary’ provisions found within various modern awards and with the inherent lack of employee wage safeguards being a key driver for change, the Commission has created new rules that govern same.

Presently 21 modern awards will be varied to incorporate a model annualised salary term including:

  • Clerks–Private Sector Award
  • Manufacturing and Associated Industries and Occupations Award
  • Hospitality Industry (General) Award
  • Restaurant Industry Award
  • Mining Industry Award
  • Legal Services Award
  • Banking, Finance and Insurance Award

Amongst other things, the new annualised salary provisions introduce several new and onerous notification, record-keeping and wage reconciliation obligations on employers who pay their award-covered employees annualised salaries including:

  • notifying employees of the annualised salary, which specific award provisions are satisfied by it, and how the annualised salary has been calculated
  • limiting how many hours of overtime or weekend hours are included within it and requiring additional payments to be made if those hours are exceeded
  • keeping records of starting and finishing times and unpaid breaks, all of which must be signed by employees (or electronically approved) at the end of each pay period
  • performing salary reconciliations every 12 months to ensure employees have received at least the minimum amounts due under the award and paying any shortfall within 14 days

The Commission currently intends for the new rules to apply as and from 1 March 2020 – importantly, the new modern awards that start on 4 February 2020 as detailed in the above article must be read subject to these new rules.

Action Items:

Identify which staff are affected by the changes, carefully review the terms of the new annualised salary provisions and the employee’s existing contractual salary arrangements, correct any contractual deficiencies including updating pro-forma employment agreements, ensure payroll and accounting systems allow working hours to be recorded and are able to be reviewed and confirmed by employees each pay period. If you require any assistance or advice, please contact our Employment & Workplace Law Team.