Summary of Changes that Employers Should be Aware of

• Employers must notify employees in writing of
– the annualised salary payable to them
– the clauses of the modern award that will be satisfied by the annualised salary
– how the annualised salary has been calculated
– set the outer limit of overtime hours which the employee may be required to work in a pay period included in the annualised wage.

•  Any hours worked outside of the “outer limit” by an employee paid with an annualised salary must be paid separately from the annualised salary as overtime or with the applicable penalty rates.

•  Employers must commence an “annual reconciliation” every 12 months (or following the termination of an employee) from the commencement date of the annualised salary arrangement to ensure that the salary is equal to or more than the amount that would be have been payable to the employee under the Award (including all components). Any shortfall must be paid to the employee within 14 days.

• Employers must keep a detailed record of the employee’s start and finish time, including any unpaid breaks, and have the record signed or acknowledged in writing by the employee as a correct and accurate record during each payor roster cycle.

Please note that the proposed annualised salary clauses will only apply to full-time employees. Most of these new annualised salaries provisions will take effect from 1 March 2020.

What should Employers do next?

Prior to 1 March 2020, employers paying annualised salaries in accordance with impacted awards will need to ensure they update their internal systems and processes to address the changes to the requirements for annualised salaries. If an employer does not comply with an annualised salary clause, employers may risk underpayment claims and associated penalties for breaching a modern award.

For assistance in determining whether or not your business is caught by the new provisions and what you need to do contact our HR associate, Yvonne Walker, of HR With Ease on 0487 385 887.