On March 1st 2020, the Fair Work Commission (FWC) put into effect changes to a number of Modern Awards. The intent of these changes is to ensure employees paid under an annualised wage agreement are not worse off than they would be under the normally applicable conditions of the Modern Awards. The FWC has adopted prescriptive new requirements for employers. These requirements include enhanced record keeping and the need to perform a yearly reconciliation to ensure that the employee’s annualised wage has not resulted in any underpayment.
This page will outline what your obligations as an employer and how our new Annualised Wage solution can help you comply.
The FWC has placed into effect changes to 22 of the Modern Awards which will impact any business that pays an employee an annualised wage who is covered by one of these Awards. Given the breadth of Awards it is likely that someone you currently employ on an annualised wage will be covered by one of these Awards. Link to full list here.
These new obligations mean that employers who are paying employees an annualised wage and are covered by a Modern Award will need to take the following actions:
• Start capturing employee’s start/end times and any unpaid breaks.
• Interpret those hours based on the relevant award to work out what they would have been paid under the Award.
• Compare the employee’s annual salary against what they’d earn under the Award.
• If their annualised salary is less than what they would be entitled to under the Award, process a transaction to make good on any underpayment.