Annualised Salary Changes

The Fair Work Commission (FWC) has handed down a decision that will affect the annualised salary clause of many modern awards. These clauses will take effect from 1st of March 2020 and will impact over 22 modern awards, including one that will cover many employees
– the Clerks Private Sector Award 2010.

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What is annualised salary?

An annualised salary allows employers to pay their employees based on an annual salary rather than paying them based on specific hours each week. The agreement should still ensure that the employee is not worse off than compared to what they would be entitled to under the relevant modern award. This is an attractive option for employers as it removes much of the administrative burden of paying irregular amounts each pay period or roster cycle.

With the issue of underpayments front of mind, the new provisions imposed by FWC will require employers to take more care when relying on annualised salary arrangements for their full time employees.

What Awards are Covered?

Banking, Finance & Insurance Award

Clerks – Private Sector Award

Contract Call Centres Award

Legal Services Award

Mining Industry Award

Oil Refining & Manufacturing Award

Which Awards are Covered?

Salt Industry Award

Telecommunications Services Award

Water Industry Award

Broadcasting & Recorded Entertainment Award

Local Government Industry Award

Manufacturing & Associated Industries & Occupations Award

Oil Refining & Manufacturing Award

Pharmacy Industry Award

Rail Industry Award

Horticulture Award

Pastoral Award

Hydrocarbons Industry (Upstream) Award

Health Professionals Award

Marine Towage Award

Restaurant Industry Award

Hospitality Industry (General) Award

Key Changes

Employers will need to notify
employees in writing of

  • The annualised salary payable to the employee
  • The clauses of the modern award satisfied by the annualised salary
  • How the annualised salary has been calculated for the employee
  • Specify the outer limit of ordinary hours that would attract a penalty rate or overtime

Employers are obligated
to keep a record

Employers must keep a record of start and finish times of all employees under an annualised salary arrangement, as well as any unpaid breaks. The employees must sign on/off or acknowledge in writing that the record is correct during each pay period or roster cycle.

Employers to conduct a
reconciliation each year

Employers must undertake a reconciliation every pay period and every 12 months involving a comparison of the annual salary paid and the amount that would have been payable to the employee if they had been paid in accordance with the modern award. Any shortfall must be paid to the employee within 14 days.

At Ascender, we view technology as an enabler, giving you more time and resources to focus on putting your people first.

Ascender In-platform solutions can help support your business managing these complex changes with minimal disruptions to your operations.

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The content of this information sheet should be used as a general guide only. Precautions have been taken to ensure the information is accurate, but Ascender does not guarantee, and accepts no legal liability whatsoever arising from or connected to, the accuracy, reliability, currency or completeness of any material contained in this information sheet or its website or on any linked site. This information sheet is not a substitute for independent professional advice and recipients should obtain any appropriate professional advice relevant to their particular circumstances.