How to stay compliant with the new annualized salaries (March 2020)
Fair work commission (FWC) has recently announced some key changes that will completely change the provisions of annualized salaries on 1 March 2020 under the 22 modern awards. The changes will not affect before this date. If you are a business leader, it is time to re-check your employment obligations as any kind of breach will lead you to the severe consequences. All the business leaders or HR and Payroll managers are obligated to track the time and attendance of the employees even if they are salaried.
According to the fair act, the awards have been amended and usually, these awards include overtime, travel, and allowances. So, new clauses regarding the annualised salary arrangements will be included in the modern awards. Following are the award provisions that currently allow employers to pay the annual salary accordingly:
• minimum wages (clause 13);
• allowances (clause 18);
• overtime and penalty rates (clause 23); and
• Annual leave loading (clause 24.3).
The act is implemented to stop the wage theft so, as a business owner or HR manager, you might need to make a few changes in your organisation and follow the action. Fair work ombudsman (FWO) is continuously building strategies to ensure that employees are getting their fair wages.
Changes that employers must know
1. Employers must inform the employees in writing about the annual salary. It is liable to them to add it in the documents that how the salary is calculated. So, they need to outline every point including overtime or late comings and how it will impact the performance and salary of the employee.
2. If an employee has worked for more hours than the “outer limit” then, they need to be paid for overtime by the separately to the annualised salary.
3. Employers are responsible to undertake annual reconciliation every 12 months from commencement of the annualised salary arrangement to ensure that the payable amount in accordance with the modern award. And in case of any shortfalls, employers have 14 days to pay off.
4. All the changes in the annualised salary require employers to track the details of employees from the starting and finishing times. Later, the employee should acknowledge or sign the record and confirm that the calculation is right.
5. Under the award of the hospitality industry in general and government, both can terminate the annualised salary contract by giving the notice of 12 months.
Final Thoughts
We at DHRP understand the process of Payroll and remuneration and that is why if you are trying to implement the effective Employee onboarding software, we are here to help. All you need is to keep the track of employee details and ensure the implementation of the changes. So, now if organisations fall under the impacted awards need to ensure that the system is in place 1 March 2020.
