Annualised Salary Changes - A Recap
We are now in March which means the new annualised salary provisions are in place.
Firstly, we think it important to address some misconceptions we have heard:
Misconception 1: You pay someone above the Award, so you don't need to keep record.
Whilst you can potentially utilise a carefully set-off clause it still doesn't exempt you from certain record keeping requirements. Ensure you have spoken to your legal team to obtain further clarification and assistance when it comes to using a set-off clause and avoid making any assumptions.
Misconception 2: You can make it the responsibility of the employee.
As an Employer, you need to ensure you are meeting your requirements. You are unable to shift this responsibility to your employee to ensure they are recording their hours in a compliant manner. You can't not pay your employee because they fail to record their time.
Misconception 3: The changes are relevant to your entire workforce.
The new provisions impact only those who are covered by one of the 18 Awards. There will be some changes to a further four awards, however at present there are just the 18 Awards impacted. Most business will be in some way impacted. Be sure to understand those in your business who are Award covered.
Misconception 4: It will be OK to sit and wait to see how things pan out before doing anything about it.
We continue to see so many cases of underpayments in the media. Sitting and waiting is a sure way for you to be non-compliant.
For your impacted employees, by now you should have:
Classified your employees by Award and Level. Know in your business who is impacted by the new provisions and ensure your people leaders are across this also.
Reviewed your employee contracts, updated the wording as required and issued contract variations to your impacted employee's.
Discussed the changes and impacts with your employees along with clear expectations outlined on what they are required to do moving forward. i.e. Recording their hours of work in the payroll or time and attendance system.
Documented the current work patterns for your Award covered employees.
Reviewed your non-award based employees to ensure contracts are still in order - this is the perfect opportunity to complete a full review of you employment contracts.
Determined how you will manage the required review every 12 months and on termination’s. This can be a work in progress, however be sure not to leave this work until March 2021, the task will be time consuming and detailed.
Ensured your policy wording is current and doesn't contradict the new provisions.
We suggest employers continue to manage the changes very closely ensuring you are held in good stead and meeting ongoing compliance requirements:
For those that created working groups to implement the changes - keep them going! Just because the changes are now effective doesn't mean you should stop meeting. Potentially meet less often, but be sure to keep in contact so the relevant departments can discuss the impact the new provisions having on your teams and the overall business.
Ensure your employees are clear on their expectations and are adhering to the new requirements by either their managers and/or HR ensuring they are capturing the required hours.
Ensure payroll are OK to run their reconciliations. 12 months may seem like a long way away - but keep in mind that reconciliations need to also be completed when an employee ceases employment. What additional pressure could this put on the payroll department on staff exits?
Make sure you review the data coming out of your payroll or time and attendance system and ensure it will be workable when the time comes to complete your reconciliations. You don't want to be ill-prepared when the time comes to complete the look-back.
The next 12 months will be really interesting to see how the new provisions work in ‘real life business’ in terms of the impact, if any, on additional work, workplace flexibility and cultural shifts.