The Fair Work Commission enacted amendments to annualised salary provisions of select modern
awards with effect on and from 1 March 2020. The relevant awards impacted include Banking, Finance and Insurance, Clerks, Legal, Mining, Pharmacy and Telecommunications.
This is significant change, following large scale enquiries into the prevalence of employees working excess hours (i.e. beyond their contracted full-time work commitments), without reward.
What does this mean for an employer?
Information
As an employer, you are required to ensure that your existing employees are provided with information about this new scheme and for new employees, you must provide the appropriate commentary and information about the standard scheme.
Specific information that you must provide to your employees in an annual wage arrangement includes annual wage payable, which award entitlements are included in the annual wage, how the annual wage has been calculated, and the maximum number of penalty/overtime hours an employee can work without receiving an additional payment.
Record keeping
The employer must also ensure that they maintain all records of their employees’ start times and finishing times and any unpaid breaks taken by the employee. This record is utilised for the annual reconciliation.
Annual reconciliations
The employer is required to conduct annual reconciliations for each employee. This must take place every 12 months, when the arrangement ends or when the employment ends.
The purpose of this annual reconciliation is to ensure the employee has been paid at least the same amount payable if the employee was not on an annualised salary. If there is a shortfall between the amount the employee is entitled and the amount paid to the employee, the employer must pay the employee the difference with 14 days.
What if you do not comply with the new requirements?
The penalties for non-compliance are set out in the Fair Work Act and they are significant. An employer can be penalised up to $63,000 per breach.
How does working from home arrangements impact this?
This scheme applies to all employees pursuant to the impacted awards, whether they are working from home or not. As such, during this self-isolation period, all annualized salary employees covered by the amended awards, should still be keeping a record of their working hours.
For any questions or to determine if your business complies with the new scheme, please do not hesitate to contact Jenkins Legal Services.
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