Changes to modern award annualised salary clauses

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Overtime and Reasonable Additional Hours

By Mark Cox, Director and Renae Harg, Senior Associate 

New annualised salary clauses for a number of modern awards come into effect as of 1 March 2020. The annualised salary clauses increase the obligations on employers in relation to modern award annualised salaries, including notifications to employees, increased record keeping obligations and reconciliation of the amounts paid.

The requirements of the annualised salary clauses are mostly similar across the affected modern awards but there are some key differences. These key differences include that some affected modern awards will require employee agreement to an annualised salary agreement and differences in the way the annualised salary needs to be calculated.

The key obligations common across all affected modern awards are:

  • Employers will need to notify employees in writing of the annual salary payable to them, clauses of the modern award which are satisfied by the annual salary and for most affected modern awards, how the annualised salary has been calculated.
  • The annualised salary arrangement/agreement must detail the outer limit of any penalty and overtime hours worked.
  • Any hours worked outside of the outer limits must be paid in accordance with the applicable provisions of the modern award. These payments must be made in the relevant pay cycle.
  • Employers must keep records of the start times and finish times and unpaid breaks for each employee. The employee must sign or acknowledge the record as accurate in the relevant pay cycle.
  • Each 12 months, employers must calculate the amount which would have been payable to the employee under the modern award and compare this with the amount the employee received under the annualised salary arrangement. Any shortfall must be rectified within 14 days.

What should employers do?

Employers should review their existing business practices, including their recording arrangements for employees covered by the affected modern awards on annualised salaries, employment contracts and reconciliation every 12 months to ensure compliance with the new provisions.

Contact us to discuss any changes which may need to be made to your business practices and/or template employment agreements.

Affected modern awards

Banking, Finance and Insurance Award 2010

Broadcasting and Recorded Entertainment Award 2010

Clerks – Private Sector Award 2010

Contract Call Centres Award 2010

Horticulture Award 2010

Hospitality Industry (General) Award 2010

Hydrocarbons Industry (Upstream) Award 2010

Legal Services Award 2010

Local Government Industry Award 2010

Manufacturing and Associated Industries and Occupations Award 2010

Marine Towage Award 2010

Mining Industry Award 2010

Oil Refining and Manufacturing Award 2010

Pastoral Award 2010

Pharmacy Industry Award 2010

Rail Industry Award 2010

Restaurant Industry Award 2010

Salt Industry Award 2010

Telecommunications Services Award 2010

Water Industry Award 2010

Wool Storage, Sampling and Testing Award 2010

Please note further submissions have been sought as to whether the amended annualised salary clause will be included in the Health Professionals and Support Services Award 2010.