2.5% increase to Award wages

2.5% increase to Award wages

Latest News & Events

 

2.5% increase to Award wages

The Fair Work Commission has handed down its decision in the 2020-2021 Annual Wage Review.

The result is a 2.5% increase in the National Minimum Wage taking it to $772.60 per week or $20.33 per hour. This increase flows on to modern awards effective from 1 July 2021 except for the following awards where the Commission has decided to delay the implementation of the increases:

  1. For the General Retail Industry Award 2020, the increases will come into effect on 1 September 2021.
  2. For the following modern awards and modern enterprise awards, the increases will come into operation on 1 November 2021:
  • Air Pilots Award 2020
  • Aircraft Cabin Crew Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Airport Employees Award 2020
  • Airservices Australia Enterprise Award 2016
  • Alpine Resorts Award 2020
  • Amusement, Events and Recreation Award 2020
  • Dry Cleaning and Laundry Industry Award 2020
  • Fitness Industry Award 2020
  • Hair and Beauty Industry Award 2010
  • Hospitality Industry (General) Award 2020
  • Live Performance Award 2020
  • Mannequins and Models Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Nursery Award 2020
  • Racing Clubs Events Award 2020
  • Racing Industry Ground Maintenance Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020
  • Sporting Organisations Award 2020
  • Travelling Shows Award 2020
  • Wine Industry Award 2020.

Please also remember that the Superannuation Guarantee Charge increases by 0.5% to 10% effective from 1 July 2021 as well.

So here are 4 things that you need to do:

  1. Review rates of pay to ensure that all employees are being paid at or above award rates
  2. If you currently have annualised wage or salary arrangements in place with any employees, review those to ensure that they are compliant with minimum requirements and that both minimum award rates and any setoff award provisions are adequately covered by the annualised wage or salary
  3. Make the required adjustment to superannuation guarantee contributions; and
  4. Review your employment contracts to ensure that they reflect the new minimum rates and superannuation guarantee and that they have picked up on any variations to the Fair Work Act (such as the recent casual employment variations) and modern awards that have occurred in recent times (there have been quite a number of variations to modern awards in the last 12 months as part of the modern award review process).

If you need assistance with any of this, please do not hesitate to contact Liam Maguire on 0421 592 541 or at liam@ridgelinehr.com.au.

CONTACT US

Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094

enquiries@ridgelinehr.com.au

6 Ellesmere Ave, Croydon Victoria 3136

Peter Maguire : 0438 533 311

PARTNER LINKS

TELL US WHAT YOU NEED HELP WITH

Superannuation Guarantee increases coming

Superannuation Guarantee increases coming

Latest News & Events

 

Superannuation Guarantee increases coming

The Superannuation Guarantee (SG) is the minimum percentage of ordinary time earnings before tax that an employer has to pay an employee (or a contractor deemed to be an employee for superannuation purposes by the ATO). It is currently 9.5% and has been at that rate since 1 July 2014.

However, it is increasing to 10% from 1 July 2021 and further annual increases are scheduled as follows:

  • 10.5% from 1 July 2022
  • 11% from 1 July 2023
  • 11.5% from 1 July 2024
  • 12% from 1 July 2025

Currently, employees who earn less than $450 per month are excluded from eligibility for the SG but the Federal Government has recently announced its intention to remove that qualification with effect from 1 July 2022.

The Superannuation Guarantee is a statutory obligation – it is mandatory and failure to meet that obligation can result in prosecution for breach of the legislation and enforceable orders for back payment of unpaid superannuation contributions.

Need to update your employment contracts?

Need clarification on these changes?

Contact us at enquiries@ridgelinehr.com.au if we can be of assistance.

CONTACT US

Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094

enquiries@ridgelinehr.com.au

6 Ellesmere Ave, Croydon Victoria 3136

Peter Maguire : 0438 533 311

PARTNER LINKS

TELL US WHAT YOU NEED HELP WITH

Review of annualised wage arrangements

Review of annualised wage arrangements

Latest News & Events

 

Do you need to comply with modern award “Annual Wage” rules? 

About a year ago, the Fair Work Commission made variations to a number of modern awards to insert or change provisions on Annual (or Annualised) Wage Arrangements.

This really arose from widespread abuse of annualised wage arrangements most notably in the hospitality and retail industries where people have been paid on an annualised wage arrangement and been required to work hours well in excess of what they were actually getting paid for.

These new provisions took effect from 1 March 2020 and that means that it is coming up to time to do the first annual reconciliation.

Looking at the Clerks – Private Sector Award 2020 which has pretty broad application across industries, the relevant clause (Clause 18) sets out:

  1. The matters that can be included in an Annualised Wage Arrangement such as award minimum rates, allowances, penalty payments, overtime, shift and annual leave loadings and a few other items
  2. That the employer must advise the employee in writing of the amount of the annualised wage and how it was calculated, detailing each component and any penalty rate and overtime assumptions used in the calculation plus the outer limit of hours that the employee can work under the annualised wage arrangement without being entitled to additional payment of penalty rates or overtime rates under the award.
  3. That the employer must do a reconciliation of the employee’s paid wages against what they would have got under the award every 12 months and when they leave employment and, fort that to happen, the employer has to record the employee’s starting and finishing times and any unpaid breaks and have that signed off by the employee at the end of each pay period or roster cycle. 

On face value, that appears to tell us that these rules apply to any employee who would be covered under a modern award that contains such a clause – in this case, every receptionist, accounts clerk, order intake clerk, etc in most industries attract coverage under the Clerks – Private Sector Award 2020.

Sadly, for many employers and employees, that would not be a welcome addition to their working day or their compliance requirements. 

However, it seems that they might not necessarily have to. On their website, the Fair Work Ombudsman says: “Employers can still pay all employees an annual salary without using annual wage arrangements in an award as long as it covers all of their minimum entitlements. Employers should consider getting independent advice to make sure they’re paying their employees enough.”

That would suggest that you can just do a common law contract stipulating an annualised wage arrangement (call it a salary just to distinguish it from the award provisions) and not have to worry about the award clause of itself.

If you elect to do take the common law option, make sure that:

  1. You have accounted for all of the monetary provisions that would apply to the employee based on their real hours of work (when they are and how many they are) and that they really are better off monetarily under the contract than they would be under the award;
  2. There is a written employment agreement that sets out the terms of that contract including the specification of any set-off arrangements (eg where overtime payments or annual leave loading or other provisions have been provided and set off in total remuneration);
  3. The employee understands and accepts the contract on that basis and signs off on the employment agreement as evidence of that acceptance;
  4. You regularly review remuneration paid under the contract of employment to take account of any changes in award conditions (eg annual minimum wage reviews) and ensure that the employee stays better off under the annualised salary arrangement than they would be under award conditions: and
  5. You understand that, while you may be able to provide and set off monetary entitlements under the award against an annualised salary, you actually cannot contract out of awards. That may mean that, if the employee believes that the annualised salary is not adequate compared to award entitlements, the dispute settlement procedure in the award could come into play.

Because these matters are complicated, all employers should ensure that they have access to competent professional workplace relations advice. 

More information is available at  https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/past-website-news/new-rules-for-annualised-wage-arrangements#who-do-the-new-rules-affect

You can take advantage of our free first consultation if you would like to see whether we might be able to help – contact us on 0438 533 311 or at https://ridgelinehr.com.au/contact-us/

CONTACT US

Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094

enquiries@ridgelinehr.com.au

6 Ellesmere Ave, Croydon Victoria 3136

Peter Maguire : 0438 533 311

PARTNER LINKS

TELL US WHAT YOU NEED HELP WITH

Heads up on award wage increases – round 3

Heads up on award wage increases – round 3

Latest News & Events

 

Heads up on award wage increases – round 3

When the Fair Work Commission handed down last year’s annual wage review decision it divided awards into 3 groups based on the level of impact that COVID-19 had had on the particular industry. Some had the 1.75% increase applied from 1 July 2020, some from 1 November 2020 and those worst affected now have their turn from 1 February 2021. These are in the main awards that apply in the hospitality, entertainment, tourism and retail sectors.

The relevant awards are:

 Air Pilots Award 2020
 Aircraft Cabin Crew Award 2020
 Airline Operations-Ground Staff Award 2020
 Airport Employees Award 2020
 Alpine Resorts Award 2020
 Amusement, Events and Recreation Award 2020
 Commercial Sales Award 2020
 Dry Cleaning and Laundry Industry Award 2020
 Fast Food Industry Award 2010
 Fitness Industry Award 2010
 General Retail Industry Award 2010
 Hair and Beauty Industry Award 2010
 Horse and Greyhound Training Award 2020
 Hospitality Industry (General) Award 2020
 Live Performance Award 2010
 Mannequins and Models Award 2020
 Marine Tourism and Charter Vessels Award 2020
 Nursery Award 2020
 Professional Diving Industry (Recreational) Award 2020
 Racing Clubs Events Award 2010
 Racing Industry Ground Maintenance Award 2020
 Registered and Licensed Clubs Award 2010
 Restaurant Industry Award 2020
 Sporting Organisations Award 2020
 Travelling Shows Award 2020
 Vehicle Repair, Services and Retail Award 2020
 Wine Industry Award 2010

For employers, the different scenarios that can apply are:

1. If you have employees who are covered by a modern award and you otherwise apply all of the terms and conditions of the award, you must ensure that employees are paid at least the award rate for their classification as adjusted for this decision.

2. If you have employees who are award free and not covered by an enterprise agreement, you must ensure that they are paid at least the National Minimum Wage as adjusted for this decision.

3. If you have employees who are covered by an award and you pay them on an annualized wage basis or on a salary or all purpose rate which sets off certain monetary employment conditions such as annual leave loading, overtime and shift loadings, penalty payments and allowances, you need to recalculate the rate of pay to ensure that the employee remains better off overall against award entitlements and comply with any award provisions that might apply to annualized wage arrangement.

4. If you have employees who are covered by an enterprise agreement which provides for annual adjustment of wages in line with Annual wage Review decisions of the Fair Work Commission, you need to adjust wages by 1.75% from the operative date for the relevant award.

5. If you have employees who are covered by an enterprise agreement but the agreement does not provide for annual adjustment as per 4., you need to ensure that wages paid are at least equal to those applying to the underpinning modern awards or the National Minimum Wage as applicable from the relevant operative date.

6. You need also to have regard to any provisions in employment contracts which might provide an obligation to pass on any increases separate from or additional to any of the above scenarios.

The Fair Work Ombudsman has a Pay Calculator Tool on its website and also publishes Pay Guides for each award – these provide detailed advice on ordinary time and overtime and penalty rates for each classification in the relevant award. You can access these resources at https://www.fairwork.gov.au/pay/minimum-wages/pay-guides.

If you need assistance in understanding and applying the effects of this decision in your business, we are happy to assist.

To can take advantage of our free first consultation – contact us on 0438533311 or at https://ridgelinehr.com.au/contact-us/

 

CONTACT US

Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094

enquiries@ridgelinehr.com.au

6 Ellesmere Ave, Croydon Victoria 3136

Peter Maguire : 0438 533 311

PARTNER LINKS

TELL US WHAT YOU NEED HELP WITH

Federal workplace relations changes

Federal workplace relations changes

Latest News & Events

 

Federal workplace relations changes up for debate in 2021

Recently, the federal government introduced the Fair Work Amendment (Supporting Australia’s Economic Recovery) Bill 2020 to the House of Representatives with expectedly mixed reactions from employer and union groups.

The bill proposes significant changes in a number of key areas:

  • The definition of a casual employee in an attempt to dispel confusion about what constitutes a casual employee and what their entitlements are (recent Federal Court decisions have extended rights of permanent employees to some who had been designated as casual and paid a casual loading by their employer)
  • A legislated obligation on an employer to offer conversion of a casual employee with
    12 months service qualified by an exemption in certain circumstances
  • Simplification of the processes and tests required to make an enterprise agreement
  • Variations to award provisions to allow part-time employees in certain industries (predominantly retail and hospitality awards) to agree to work additional hours at ordinary rates of pay
  • Provisions enabling employers to give flexible work directions under those same awards in relation to the work to be performed and the location at which work is to be performed including at home
  • Extension of the operating period for greenfields agreements for new projects to up to 8 years (currently 4 years)
  • A new criminal offence for wage theft with penalties of up to 4 years imprisonment and $1.1 million for an individual and $5.55 million for a corporation
  • The ability for Courts to refer small claims to the Fair Work Commission for conciliation and arbitration
  • Outlawing the advertisement of jobs with wages below the level of the federal minimum wage

The ACTU and the federal opposition have already signaled their opposition to some of the proposed changes and a lively debate possibly supported by a union campaign can be expected in the New Year.

More to come in 2021…..

CONTACT US

Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094

enquiries@ridgelinehr.com.au

6 Ellesmere Ave, Croydon Victoria 3136

Peter Maguire : 0438 533 311

PARTNER LINKS

TELL US WHAT YOU NEED HELP WITH

Major changes to building and construction award

Major changes to building and construction award

Latest News & Events

 

Major changes to Building and Construction Award  

 

Over the past few months, there have been a number of decisions made by the Fair Work Commission which have resulted in significant changes to the Building and Construction General On-site Award 2010. 

These are variously associated with the 2019-2020 Annual Wage Review, the modern award review process and temporary arrangements that have been introduced due to the COVID-19 pandemic. 

Details of all of these changes are set out below. 

2019-2020 Annual Wage Review

The Fair Work Commission recently handed down the 2019-2020 Annual Wage Review decision which was to increase the national minimum wage and award minimum wages by 1.75%. 

Unusually this year, in light of the COVID-19 pandemic impact on businesses, they decided to set different operative dates for different industries – in the case of the building and construction and trades awards, that date is 1 November 2020 (rather than the standard date of 1 July that normally applies). 

Employers should check that employees’ wages are at or above award wage level including allowance for any award conditions set off in remuneration. 

The current Fair Work Ombudsman Pay Guide for this Award can be accessed at Building and Construction General On-site Award [MA000020] Pay Guide  

This will be updated from 1 November 2020 when the new rates take effect.  

Modern award review 

The modern award review process which has been going on since 2013 has a resulted in a number of changes to calculation of minimum wages, the treatment and application of allowances, arrangement of ordinary hours of work and RDOs and various other matters – these generally take effect from 1 July 2020. 

Simplification of minimum award wage calculations 

The Building and Construction General On-site Award 2010 has had an extremely complicated method of calculating the award rate for each classification level in the Award. 

This involved firstly identifying the base rate applicable to the relevant classification level and then adding a Special Allowance off $7.70 per week (something that was created years ago to give employees a pay rise when the rules didn’t allow for one) and then adding an industry allowance and, if the employee qualified,  a variety of other allowances could apply. 

The industry allowance was intended to compensate employees for the nature of the industry but additionally there were a number of allowances and special rates that applied on top of this.

From 1 July 2020, the method for calculating ordinary time rates for weekly employees (as per Clause 19.3 (b) of the Award) is by adding the minimum wage specified and the industry allowance for the industry sector and then any of the following that have application to the employee in question: 

  • Tools and protective or other clothing or equipment (Clause 20.1)
  • Underground allowance (Clause 22.2)
  • Air-conditioning and refrigeration industry allowances (Clause 22.7)
  • Electrician’s licence allowance (Clause 22.8)
  • In charge of plant allowance (Clause 22.9) 

Industry Allowance 

The industry allowance has been amended to reflect a single industry allowance that replaces and compensates for the Special Allowance and a number of complex industry, disability and expense related allowances have been removed in the Award.  The rate for the industry allowance is based on the relevant construction sector and has been defined as a percentage of the “weekly standard rate” (standard rate means either the weekly or hourly minimum wage as stated for a Level 3 (CW/ECW 3) employee in clause 19.1). There is one rate for the commercial building industry (6% of the weekly standard rate = $51.75 per week) and a second for the residential building industry (4.8% of the weekly standard rate = $41.40 per week). 

Tool Allowance 

The tool allowance has also been revised to make it clear that employees are entitled to the allowance to cover maintaining their existing tools, not just purchasing new tools. Employees are also now entitled to be reimbursed for steel capped boots they are required to wear. 

Fares and travel pattern allowance

A significant change relates to the fares and travel pattern allowance employees receive. This allowance is normally $17.43 per day. Employees will now only receive this allowance, where they: 

  • start and finish their work day on a construction site; or
  • are required to perform prefabricated work in an open yard and are then required to erect or fix the pre-fabricated materials on-site. 

So employees who start and finish at a depot and are transported in paid time to and from the construction site are generally not eligible for the allowance. 

Additionally, Employees will no longer receive the travel allowance if they are offered free transport to the site or provided with a vehicle. Employees will also no longer get the allowance on days they do not work, like on an RDO or leave day. 

Living away from home allowance 

The Award amendments clarify an employer’s obligations in relation to this allowance. There are now clear options as to how entitlements are to be provided and how meal expenses can be reimbursed as follows: 

(i) pay the employee the greater of $72.02 per day or an amount which fully reimburses the employee for all reasonable accommodation and meal expenses incurred; or 

(ii) provide the worker with accommodation and three adequate meals each day; or

(iii) provide the worker with accommodation and reimburse the employee for all reasonable meal expenses; or 

(iv) where employees are required to live in camp, provide all board and accommodation free of charge. 

Rostered Days Off (RDOs)

The Award now provides greater flexibility in relation to RDOs. This includes allowing for the banking of RDOs and allowing an agreement to be reached between the employee and employer as to how and when an RDO is taken. 

Capping of daily ordinary hours 

Ordinary hours of work for part-time and casual employees have been capped at 8 hours per day. This means that any hours worked in excess of 8 hours per day by a part-time or casual employee are overtime and payable at overtime rates. 

It should be noted that, for full-time employees, the award prescribes that, unless the employer and a majority of employees agree otherwise, an RDO arrangement applies whereby 19 days of 8 hours and 1 RDO make up each 20 days (4 weeks) worked. 

If the employer and employees agree on a variation to that arrangement, no more than 8 ordinary hours can be worked in one day. 

Under any hours of work arrangement, full-time employees may work no more than 38 ordinary hours can be worked in one week (or an average of 38 hours over 4 weeks). 

Time off in lieu of overtime 

The Award now allows an employer and employee to agree to take time off instead of being paid for overtime that has been worked. This ability is limited to weekly full-time and part-time employees and time off is calculated on the basis of the hours of overtime actually worked. Time off must be taken within 6 months. There are a number of other conditions attached to time off in lieu arrangements that must be complied with. 

Payment of annual leave loading 

The Award now simplifies how annual leave loading is to be calculated – on the employee’s ordinary rate of pay rather than the complicated arrangement that existed previously.

Employers should familiarise themselves with the proposed changes to ensure that from the start of the first full pay period on or after 1 July 2020, their employees are being paid correctly and in line with any amendments to the Building Award. 

Please note that the modern award review process has not been completed for the Building and Construction General On-site Award 2010 but that should occur in the next few months – when it has, the “2010” will be replaced with “2020.   

Additional measures during the COVID-19 pandemic 

There is a new Schedule X  in the Award setting out temporary flexibilities with leave during the COVID-19 pandemic – these apply for the period from 11 August 2020 to 30 September 2020. 

These provide that: 

  • employees can take up to 2 weeks if the employee is required by government or medical authorities or on the advice of a medical practitioner to self-isolate and is consequently prevented from working, or is otherwise prevented from working by measures taken by government or medical authorities in response to the COVID-19 pandemic.
  • instead of an employee taking paid annual leave on full pay, the employee and their employer may agree to the employee taking twice as much leave on half pay.
  • A number of conditions are attached to these arrangements. 

Given the current business and civil restrictions applying in Victoria, it could be expected that there will be an extension to the period of operation of these arrangements.

Need some help?

Just give us a call on 0438 533 311 or send us an enquiry through the contact form below and we will be happy to have a conversation about your needs and how we can help. 

CONTACT US

Ridgeline Human Resources Pty Ltd
Abn : 24 091 644 094

enquiries@ridgelinehr.com.au

6 Ellesmere Ave, Croydon Victoria 3136

Peter Maguire : 0438 533 311

PARTNER LINKS

TELL US WHAT YOU NEED HELP WITH