Changes to Fair Work rules, coming into effect this week, will impact most, if not all, employers. Fair Work’s annualised wages arrangements impose new record-keeping obligations on employers, including the requirement to keep a daily record of start times, breaks and finish times for all employees.
All P+Y clients who employ staff are requested to review the new rules and take action promptly.
Q: When do the new obligations commence?
NOW – The new rules start from the first full pay period on or after 1 March 2020.
Q: What does this mean for my business?
STEPS 1 to 5 will help you assess how the changes may impact your business.
STEP 1.
Identify your full-time employees as at 1 March 2020. The new rules do not apply to part-time or casual employees, contractors, full-time employees who are covered by a Registered Workplace Agreement or Enterprise Agreement or full-time employees who earn over the high income threshold (currently $148,700).
STEP 2.
Identify the awards which apply to your full-time employees (subject to the rules in STEP 1). There are more than 100 awards that cover most people who work in Australia, depending on industry and type of job performed.
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- Review the list of awards here
- Read the coverage clause (usually clause 4) and the job classification (usually in the pay clause or a Schedule) to determine whether the employee and their job role is governed by the award
- Note that the applicable ward is based on the job performed. For example:
– Most office/administration employees will be covered under the Clerks Award regardless of the industry of the business.
– Professional staff, managers or higher income employees may not be covered by a modern award even if one applies to the industry in which they work, due to the limitations to the job classifications that are stipulated in the award.
STEP 3.
Is it a listed award? The Fair Work changes are being phased in and currently only apply to the awards listed here. Awards that have wide spread application, such as Clerks Award for most administration employees, and Manufacturing Award for most factory floor employees, are on the list. Note that Hospitality and Restaurant awards are not on the list yet, however they are coming soon!
STEP 4.
If you have full-time employees (STEP 2) who are covered by a listed award (STEP 3) you need to comply with new record-keeping requirements before the end of the current pay period. The record keeping requirements include:
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- Record each full-time employee’s annual wage arrangement in writing and give the employee a copy – Fair Work has stipulated certain items which must be incorporated.
- Keep daily records of all start times, finish times, and unpaid break times
- The daily records must be signed, or acknowledged as correct, in writing by the employee (including electronically) for each pay period or roster cycle. This could be managed with a manual sign in/out form, or the implementation of a more sophisticated HR program or App.
- Implement an annual review process. At the anniversary of each full-time employee’s commencement, you need to ensure that the employee was paid no less than the amount that the employee would have received under the award for the work performed over the year, and the actual hours of work as collected from your daily records. If an employee has been underpaid you are required to make up any shortfall within 14 days.
Important – the burden of proof for actual hours worked rests with the employer.
STEP 5.
Education and ongoing compliance. Several useful links are provided below to give you further information. In particular, the Fair Work Ombudsman media release sets out all of the requirements – please read these carefully. If you are unsure of any of the requirements, we recommend that you seek specialist advice to ensure that you maintain competence with the new rules:
The HR legal environment is very complex. We recommend that you seek expert independent advice in relation to these matters. P+Y have several contacts in our professional network who could provide assistance. Please let us know if you need help.
To ask any questions and discuss this matter further, please call us on (07) 3217 5700 or email [email protected]
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P+Y Accountants & Business Advisory | P: (07) 3217 5700 | E: [email protected]
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