The recent Fair Work Commission increase to the minimum wage (which came into effect 1 July) had employers checking pay rates and awards and rushing to make relevant adjustments to ensure they were compliant with the changes.
We had many discussions with clients who assumed that because they pay their staff above award rates, this would not affect them. They were shocked to learn that even they could be in breach of their obligations – in part because we have some of the most complex employment regulation in the world.
So if you haven’t checked to make sure you have all your payroll ducks in a row, here are a couple of areas to start with and some helpful links.
Most employees of private sector businesses will be covered by one of the 122 Modern Awards. Within each award, there will be multiple award classifications based on qualifications and training, years of experience, and tasks performed.
Minimum pay rates are directly linked to the different classifications and you will need to work out which one applies to know which rate applies.
The starting place when determining an employees award should be the Fair Work website. They have some great resources including a questionnaire to help determine the applicable award. However, you really need to get into the nitty-gritty of any applicable award (which may be defined by your industry or by the role the employee is in), reviewing the coverage clause (and exclusions) and then determining the appropriate classification.
Paying employees and payslips
Did you know that you need to specify the ordinary (minimum) rate on each of your employees payslips and separate any additional pay they may be receiving for loading, allowances or in lieu of other entitlements.
When the Fair Work increase was announced, many of our clients needed to adjust all their pay rates even though they are paying above award. This is just so they remained compliant with Fair Work obligations.
So make sure you have adjusted your employees payslips to reflect the change in the minimum wage. And if you need any assistance in determining the appropriate award or ensuring you are meeting your payroll obligations, get in touch with us.