Wage Theft – Important Legislative changes in 2020
The Fair Work Commission, following a decision from the Full Bench, has determined that annualised salary clauses are to be inserted into a number of modern awards with effect from 1st March 2020. These changes introduce important new practices for HR and payroll aimed at reducing “wage theft” and non-compliance with awards.
What does this mean for employers?
If any employees are covered by the modern awards listed in the industries/occupations that the new salary clauses will be inserted into, then it is highly likely that their employment contracts will require amendments and adjustments made to both HR and payroll practices. These changes will need to occur before the 1st of March in preparation for annual salary changes.
Will this affect your business?
As of 1 March 2020, employers with staff covered by any of the Awards that are listed below, will have a responsibility to provide:
- Written notice to their employees to notify them of their annual salary and maximum ordinary hours outside of the 38-hour working week. This is a result of the Fair Work Commission’s decision to change annualised salary provisions.
- Ensure that your employees don’t earn below minimum wage overall when they work any hours above the 38-hour working week.
- Pay employees for any overtime worked if their salary does not include overtime. If an employer discovers that an employee received less pay on their annual wage agreement than if they were paid under the award, it’s your responsibility to pay your employees the difference. This payment is required to be paid within 14 days and the process needs to be undertaken every year. This is also applicable upon the termination of contracts.
Awards That Will Change
- 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
Why have the changes been introduced?
Think of Woolworths, George Colombaris and their recent discovery of wage underpayments – it is common practice for employers to pay an overall annual remuneration to award covered employees which is intended to “set-off” and absorb all modern award monetary entitlements such as minimum wages, overtime rates, penalty rates and loadings that are otherwise separately payable under an award.
Few employers audit these annual salaries on an annual basis to ensure the overall remuneration does in fact compensate employees for each individual award entitlement that falls due.
The new award obligations introduced by the FWC are aimed at ensuring that award covered employees are properly compensated for the work they perform by making sure that their annual remuneration is adequately calculated and monitored in order to capture the full range of monetary benefits applicable under modern awards for the particular work performed.
How can Bramwell Partners help your business comply?
- The first step to ensure compliance is to determine which modern awards apply to your workplace, including the new changes, and whether employees are currently paid correctly for the work they perform.
- Secondly, amendments to employment contracts and adjustments to HR and payroll practices are highly likely to be the most practical and efficient way to comply with the obligations imposed with effect from 1 March 2020.
What will happen if you, as an employer, fail to comply?
You will breach a modern Award—colloquially referred to by the media as “wage theft”—and will attract civil penalties under the Fair Work Act 2009 (Cth).
Unsure of how this may affect your business and need more information regarding these important changes? Call our HR Consultants today on 07 3630 5695 or send us an email on firstname.lastname@example.org – Our HR consultants know how to meet the needs of business HR and compliance. Please note, information is continuing to filter through regarding these important changes. Watch this space for the most recent information.