Fair Work Australia decision will introduce changes in entitlements and record keeping requirements of clerical and administrative employees
March 2019 | News | Peter Wilson
On 27 February 2019 the Fair Work Commission (FWC) decided to significantly change the annualised salary provisions for employees covered by the Clerks Private Sector Award. The exact date that the changes will take effect are not yet known, but is expected to be announced in the next few months.
Employees who perform clerical or administrative duties and are not covered by another award or enterprise agreement that covers clerical work (such as Aged Care and Education awards) are likely to be covered by the Clerks Private Sector Award of the FWC (Award). Secretaries (including PAs, EAs or other similar titles), accounts clerks, receptionists and payroll staff are all occupations covered by the Award, irrespective of the amount paid or what is stated in an employment contract. Many of these employees who are covered by the Award are paid an annual salary (rather than wages plus overtime and penalty rates) and the market salary for work is often well above the minimum award rates.
Currently employers of people covered by the Award only need to specify in the employment contract the parts of the Award that no longer apply due to the salary paid.
Going forward employers of people covered by the Award will be required to:
1. Advise employees in writing of:
(a) The amount of the annualised wage
(b) Which parts of the Award are satisfied by the annual wage
(c) The method of calculating the annualised wage (including overtime and penalty rate assumptions e.g. for weekend or public holiday or night work)
(d) The outer limit of hours in a pay period that the employee can work without additional pay
And if an employee works in excess of the stated hours that are included in the annualised wage the employee must be paid for those excess hours, which would be in the form of paid overtime or penalty rates in addition to the annualised wage.
2. On an annual basis the employer must calculate the wages the employee would have earned under the Award and compare it to the annualised wage and within 14 days pay any shortfall.
3. Record starting and finishing times and any unpaid breaks for each employee and ensure this record is signed by the employee each pay period.
These are significant changes for employers and will likely require new employment contracts (and written statements on hours for existing employees), new hours recording systems for these employees, new payment calculation and reconciliation systems.
Whilst there will likely be some transition process for moving to the new system decided sometime in the second quarter of calendar 2019, some employers may choose to reconsider the value of having such employees on annualised payment as opposed to paying wages per the award (including any overtime and penalty rates for the pay period) plus an over award payment (e.g. increasing the hourly pay rate) to match market salary expectations.
If you require advice on whether these new rules will apply to your charity or not-for-profit, or you require assistance in reviewing employment contracts and policies, please contact Peter Wilson at Prolegis Lawyers (firstname.lastname@example.org).