Are you paying your employees a salary? Are they subject to a modern award? It may be time to complete your annual reconciliation or you run the risk of being in breach of the Fair Work Act (which can be costly not only to your business but to you personally!)The 1st of March 2021 is fast approaching, and it brings around the 12-month anniversary of the introduction by the Fair Work Commission (FWC) of the annualised wage provisions changes. By now the mechanism to be compliant with the changes should be implemented and be actively adhered to, reducing the risk to your business.
Check out the 2020 annualised wage arrangement where we run through in detail the changes and how these directly impact you.
In short, if your employees are subject to the below awards and contracted on an annual salary you are required by law to conduct a full review every 12 months after the arrangement starts, when the arrangement ends or when the employment ends.
The following awards are where employers can pay an annual salary without the employee’s agreement.
The following awards will require the employee to agree for the employer to pay an annual salary.
You need to record the annual wage arrangement in writing and give your employees a copy. This must include:
The employer must also record the employee’s:
You must acknowledge the record of hours they have worked is correct by signing in writing or electronically at the end of every pay period or roster cycle. This record is to assist in the annual reconciliations.
Effectively, the overall outcome you are looking for is to ensure that the employee is better off overall on their existing salary as opposed to being subject to their award entitlements which include the hourly rate, over-time, penalties, and allowances. If an employee's annual wage is less than the award payments that they would have received, you must pay them the difference within 14 days keeping in mind superannuation payments on the shortfall *OTE.
As these changes in legislation are implemented partnered with the introduction of technology like STP (Single Touch Payroll – now mandatory) the more data these governing bodies have access to. This increases your risk of being ‘caught’ if you are not following the above advice resulting in a wage thief. The consequences you may face are serious and include the following.
If you are affected by these changes & are feeling overwhelmed & don’t know where to start, please do not hesitate to reach out to us here at Trekk Advisory. We can provide you with tailored advice to ensure you are compliant with the changes & suggest ways to ensure your resources aren’t too heavily impacted moving forward.
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