March 6, 2020
New annualised salary provisions for full-time employees have been inserted into a range of Modern Awards. The new provisions come into effect from the first full pay period, on or after 1 March 2020.
The changes are set to have a significant impact on the way businesses in certain industries manage and implement payment arrangements for their staff.
Australia’s growing underpayment crisis has raised concerns about the reliability of annualised salary arrangements under Modern Awards. Specifically, there are concerns about the effectiveness of these provisions in ensuring that minimum terms, conditions and entitlements of full-time employees are being met.
Although most entitlements should already be accounted for, salaried employees do not typically record their time and attendance. This can make it a nightmare for employers to accurately calculate the entitlements of full-time Award employees who are paid an annualised salary.
As part of the four-yearly review of Modern Awards, the Fair Work Commission has introduced these new provisions as a way to ensure minimum entitlements are being met for Award employees who are paid on an annualised salary.
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In addition to the above requirements, some Awards will also require employers to obtain the employee’s consent to enter into an annualised salary arrangement. Further In order to terminate an annualised salary arrangement under some Awards, the employer must give 12 months’ notice (unless the employee agrees to terminate this earlier).
Who do the changes apply to?
The changes apply to employers who engage employees under the following Awards:
If you need advice and support in understanding the changes and implementing them in your business please contact us to speak with one of our consultants.
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