Employer Obligations - Changes with the new financial year
July 2016 | Article | Peter Wilson
A number of changes relating to employee entitlements, as well as tax and Award arrangements took effect on 1 July, 2016 or, in the case of the Award provisions, are planned to have effect in the near future.
A. Changes that took effect from 1 July 2016:
1. The Minimum Wage increases by 2.4% to $17.70 per hour.
This minimum applies to all employees (excluding some employees in WA, juniors, trainees, and employees on disability wages) not covered by an Award or Enterprise Agreement (EA).
No matter what work an employee is performing in Australia, it is unlawful to pay them less than the minimum wage.
A 25% loading also applies for casual employees – making $22.13 per hour the new casual minimum wage.
2. The tax-free Redundancy threshold increases to $9,936 + $4,969 for each year of service. This is relevant for any employee made redundant, as the Fair Work Act (FWA) introduced a universal minimum redundancy pay entitlement in 2009.
3. Employees earning over $138,900 p.a. cannot make an Unfair Dismissal claim, unless they are covered by an Award or EA.
B. Awards and Annual leave rules are changing
1. The annual leave rules for Award covered employees will change as part of the four-yearly review of Awards by the Fair Work Commission (FWC). Changes include the rules for requiring employees to take excess leave, cashing out leave, taking leave in advance, payment and deductions on termination, and paying leave per normal pay cycles.
It should also be noted that the annual leave rules for Award-free employees (under the FWA) differ. We have published a separate update that provides more information about these changes
2. All modern Awards are being reviewed by the FWC and Award conditions will change over 2016.
Employers should know which Awards cover their employees. We recommend that they subscribe to the relevant FWC Award subscription services so they get notified of variations in relevant awards.
Comparatively few employers do not have any Award covered employees. For example, clerical and administrative employees are covered by an Award. Thus any employer with Secretaries, Receptionists, Clerks, Accounts Payable, Payroll staff etc will have Award obligations.
Employers need to be aware of all the Award conditions relevant to their staff. For example, some Awards only allow payment of annual salaries under certain conditions, and there are hours of work and consultation on change requirements in other Awards.
If you would like to discuss any of these issues please contact Peter Wilson at email@example.com or by calling 02 9466 5022.