Significant Changes in Payment and Record Keeping Requirements for Clerical and Administrative Staff
July 2019 | Article | Peter Wilson
On 4 July 2019 a Full Bench of the Fair Work Commission (FWC) finalised arrangements related to their earlier decision that flagged significant changes to the annualised salary provisions for employees who are covered by the Clerks Private Sector Award (and some other awards). These changes, which will take effect from 1 March 2020, are described below.
The changes apply to employees who perform clerical, administrative and secretarial duties. Employees who perform clerical or administrative duties and are not covered by another award or enterprise agreement that covers clerical work (e.g. 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 titles), accounts clerks, receptionists and payroll personnel are all occupations covered by the Award, irrespective of (a) the amounts they are paid - unless they are a high income employee guaranteed to be paid over $148,700 per annum, and (b) what is stated in an employment contract. It is the duties performed that determines award coverage.
What is changing – new obligations for employers
Currently employers of people covered by the Award only need to specify in the employment contract the clauses of the Award that no longer apply due to the annual salary paid.
From 1 March 2020 employers of people covered by the Award will be required to:
1. Advise employees in writing of:
- the amount of the annualised wage;
- which parts of the Award are satisfied by the annual wage;
- the method of calculating the annualised wage (including overtime and penalty rate assumptions e.g. for weekend or public holiday or night work); and
- the outer limit of hours in a pay period that the employee can work without additional pay.
Also if an employee works in excess of the stated hours (included in the annualised wage) the employee must be paid for those excess hours (e.g. paid overtime or penalty rates in addition to the annualised wage.
2. Annually the employer must calculate the wages the employee would have earnt 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 this record must be accepted as correct by the employee each pay period. This acceptance may be indicated via paper signing or through some form of electronic consent, including email.
These are significant changes for employers and could require new employment contracts (and written statements on hours for existing employees), new hours recording systems, and/or new payment calculation and reconciliation systems for these employees.
As a result of this change some employers may choose to reconsider the value of having such employees on annualised payment as opposed to paying hourly 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 these new rules and how they apply to your charity or not-for-profit, or you require assistance in reviewing your employment contracts and policies more generally, please contact Peter Wilson at firstname.lastname@example.org