From 1st March 2020 new annualised salary clauses will be inserted into a number of modern awards. This has come about following a decision made from the Full Bench of the Fair Work Commission. The modern award changes introduce important new practises for HR and payroll intended to reduce “wage theft” and non-compliance with awards.
Which awards will be affected?
There are many awards that will be affected by this change. For a comprehensive list click here. Almost all employers employ clerical and administrative staff and given that the Clerks-Private Sector Award 2010 is one of the awards affected, many employers may need to seek legal advice to ensure award compliance.
What are the changes?
Depending upon the modern award that applies to your workplace, there will be a number of detailed mandatory requirements on employers who pay employees an annual wage. A couple of examples: a requirement to advise employees in writing of which provisions of the modern award that apply to them will be satisfied by payment of an annualised wage. Or the method the annual wage has been calculated. More information on the changes can be located here.
What does the employer need to do?
To ensure compliance an employer must firstly understand which modern awards apply to their workplace. In addition to this they need to be aware of the new modern award changes. A review should then be done to ensure employees are being paid correctly for the work they perform. Secondly, amendments to employment contracts and adjustments to HR and payroll practises are highly likely to be the most practical and efficient way to comply with the obligations.
Failure to comply
A failure to comply will amount to a breach of a modern award – colloquially referred to by the media as “wage theft” and will attract civil penalties under the Fair Work Act 2009(Cth).
If you’re unsure of what steps to take, please contact your payroll provider, Fair Work or contact us.