Annualised Salary Changes as of 1 March 2020

Overview

As you may be aware, the Fair Work Commission has introduced changes to a number of modern awards, effective 1 March 2020.

There are new obligations for employers who pay their employees under ‘Annualised Salary’ clauses in the impacted awards. These changes vary across awards, but some common requirements are listed below:

• Start times, finish times and unpaid break start/stop times must be recorded for each employee paid on an annualised salary. Employees must sign or acknowledge that the data recorded in each pay cycle is accurate.
• Written documentation must be in place, detailing which provisions of the award are included within the annualised salary.
• This documentation should specify the number of overtime or penalty rate hours (outliers) that are included within the annualised salary in each pay period.
• Employers are required to make an additional payment to the employees if they work in excess of the documented outliers specified.
• An annual reconciliation must be performed every 12 months, calculated from the commencement of the annualised salary agreement or upon termination, to determine if the employee would have been better off if paid on an hourly basis. Any shortfall must be paid to the employee within 14 days.

Who do the new rules affect?

The new rules affect the following awards:

• Banking, Finance and Insurance Award
• Broadcasting Award
• Clerks Award
• Contract Call Centres Award
• Horticulture Award
• Hydrocarbons Industry (Upstream) Award
• Legal Award
• Local Government Award
• Manufacturing Award
• Mining Award
• Oil Refining and Manufacturing Award (clerical employees)
• Oil Refining and Manufacturing Award (all other employees)
• Pastoral Award
• Pharmacy Award
• Rail Award
• Salt Award
• Telecommunications Award
• Water Award
• Wool Award

The Fair Work Commission has also included the new annual salaries clauses in the following awards, but hasn’t indicated when they will be updated with the new rules:

• Health Services Award
• Hospitality Award
• Marine Towage Award
• Restaurant Award

Disclaimer: This is not qualified tax or legal advice and should not be relied upon or used as such. If you have any questions relating to these changes, please contact a qualified advisor.