The Fair Work Commission’s new annualised salary provisions – which will come into effect on 1 March – will require employers under 22 modern awards to be much more stringent about overtime and record-keeping measures. But, as Tracy Angwin, CEO of the Australian Payroll Association asks, is this really the right approach?
From 1 March 2020, three important practices aimed at reducing wage theft and non-compliance with awards will become legally enforceable for employers:
1. Employers will need to notify employees in writing of their annualised salary and their maximum ordinary working hours outside of the 38-hour week.
2. If an employer finds that their employee received less pay on their annualised wage agreement than if they were paid under the award, they need to pay the employee the difference. Any shortfalls must be paid to them within 14 days.
3. Employers will need to keep records of the start, finish and break times of their employees.
Tracy believes the upcoming modern award changes will hurt the culture in a lot of businesses already doing the right thing in terms of flexibility of working hours among their employees. “Up until now, employers have been able to rely on a system of trust with their employees. The new annualised salary clauses in some modern awards, which will require more stringent record-keeping and overtime control measures, such as recording the start, finish and break times of employees, will completely change that. In fact, it could erode the trust between employers and their staff.”
She continues: “Payroll is one of the most complex and legislated areas of a business, but increasingly we’re finding that legislators are creating laws without properly thinking about how employers are going to implement them. The 1 March changes – and their propensity to create a ‘clock-watching’ mentality among staff – is another example of this. Clearly a commonsense approach is needed here to ensure that the intent of the legislation is in fact going to benefit each workplace environment on a practical level.”
About: Australian Payroll Association is Australia’s leading network in payroll training, consulting and advisory for employers. It offers end-to-end payroll process reviews, compliance auditing, specialist recruitment services, payroll qualifications and training courses, and a membership program. Established in 2010, Australian Payroll Association offers the only nationally accredited payroll qualifications at Certificate IV and Diploma level through its registered training organisation, Australian Payroll Institute. For more information, visit austpayroll.com.au