Modern award changes in march 2020
Employers get ready for modern award changes in 2020
Following a decision of the Full Bench, the Fair Work Commission has finalised arrangements for new annualised salary clauses to be inserted into a number of modern awards with effect from 1 March 2020. These changes introduce important new practices for HR and payroll aimed at reducing "wage theft" and non-compliance with awards.
What do employers need to do?
Review employment contracts and update HR and payroll practices to comply with the new obligations to audit annual salaries, record hours of work and backpay any shortfall when annual salaries are audited against modern award entitlements.
Modern awards impose new annual wage obligations
Employers with employees covered by the modern awards listed in the industries/occupations below are highly likely to require amendments to employment contracts and adjustment to payroll and HR practices, in preparation for annual salary changes to be introduced on 1 march 2020:
- Banking, Finance and Insurance Award 2010
- Broadcasting and Recorded Entertainment Award 2010
- Clerks - Private Sector Award 2010
- Contract Call Centres Award 2010
- Health Professionals Award 2010
- Hydrocarbons Industry (Upstream) Award 2010
- Horticulture Award
- Hospitality Industry (General) Award 2010
- Legal Services Award 2010
- Local Government Industry Award 2010
- Marine Towage Award 2010
- Manufacturing and Associated Industries and Occupations 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
Almost all employers employ clerical and administrative employees. Therefore, given that the Clerks - Private Sector award 2020 is one of the awards affected, many employers may need to seek legal advice to ensure award compliance.
What are the changes?
Depending on which modern award(s) apply to your workforce, the model clauses will impose a number of detailed mandatory requirements on employers who pay employees an annual wage in satisfaction of specific modern award entitlements. For example, a requirement to advise employees in writing of:
- which provision of the modern award that apply to them will be satisfied by payment of an annualised wage
- the mathematical method by which the annualised wage has been calculated, including specification of each separate component of the annualised wage and any overtime or penalty assumptions used in the calculation
- the outer limit number of ordinary hours which would attract the payment of a penalty rate under the award and the outer limit number of overtime hours which the employee may be required to work in a pay period or roster cycle without being entitled to an amount in excess of the annualised wage under the award
- any excess hours worked that will not be covered by the annualised wage for which separate payments under the award would apply
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