Since 1 March 2020 employers who pay annualised salaries in accordance with modern award provisions need to ensure their arrangements comply with new model ‘annualised wage arrangement’ clauses. These new clauses have replaced previous annualised salary provisions in numerous modern awards and further changes will be implemented in more modern awards at a later date. Employer obligations The model clauses expand employer obligations in relation to employee notification and record keeping, as well as wage reconciliation for employees paid a modern award annualised salary. Among other things, employers need to inform employees of the ‘outer limit’ of penalty rate hours and overtime hours they may work in a pay period before being entitled to further payment under the award. Implementing the changes Employers should: Review existing contractual annualised salary arrangements to ensure compliance with the new requirements and vary the terms of the arrangement where they do not comply Review and update employment contract templates to ensure compliance with the new requirements Ensure record keeping practices are in place which record breaks, start and finish times and hours of work performed outside ‘outer limits’, and have these records acknowledged by the employee each pay or roster cycle Review annualised wages payable for award-covered salaried employees to ensure that employees are paid all entitlements owed to them, had their salary been calculated under the provisions of the relevant modern award. Awards affected The Fair Work Commission has released four different model clauses, with clauses 1 and 3 effective from 1 March 2020. Model clause 1 affects awards that cover employees who work relatively stable hours: Banking, Finance and Insurance Award 2010 Clerks – Private Sector Award 2010 Contract Call Centres Award 2010 Hydrocarbons Industry (Upstream) Award 2010 Legal Services Award 2010 Mining Industry Award 2010 Oil Refining and Manufacturing Award 2010 (clerical employees only) Salt Industry Award 2010 Telecommunications Services Award 2010 Water Industry Award 2010 Wool Storage, Sampling and Testing Award 2010. Model clause 2 will apply to the Hospitality Award 2010 (managerial employees, commencing on a date to be confirmed). Model clause 3 affects awards covering employees who work highly variable hours and/or significant ordinary hours of work that attract penalty rates: Broadcasting and Recorded Entertainment Award 2010 Local Government Industry Award 2010 Manufacturing and Associated Industries and Occupations Award 2010 Oil Refining and Manufacturing Award 2010 (non-clerical employees) Pharmacy Industry Award 2010 Rail Industry Award 2010 Horticulture Award Pastoral Award 2010 Health Professionals Award 2010 (supervisory and managerial staff, commencing on a date yet to be confirmed). Model clause 4 will apply to three awards that require the annualised wage to be a minimum percentage amount above the relevant base award weekly wage rate specified in the award: Restaurant Industry Award 2010 Marine Towage Award 2010 Hospitality Industry (General) Award 2010 (non-managerial staff). This article also features in the March 2020 issue of Hunter Business Review.
