Minimum award rates have recently increased for all awards from the first full pay period in July 2015. It is important to undertake a review of the awards relevant to your business, often the mistake is made of assuming that only one award applies across the business. Some businesses will be covered by numerous awards and it is important to ensure that the appropriate award is applied for individual roles and that the classification is determined in line with the positions tasks and responsibilities.
Employers will often choose to engage an employee on a ‘salary’ and disregard basic employee entitlements. Employees believe that the term ‘salary’ has a status associated with it, but more often than not it is undermining their entitlements. Unfortunately the naivety of employees regarding their minimum conditions and entitlements allows this practice to continue. There are a number of resources available and the Fair Work Ombudsman has a number of online tools to assist employers determine which award applies and the correct hourly rates of pay.
Regardless of whether an employee is engaged on a salary, an employer is still required to comply with the relevant award conditions. Under most awards, an employer can annualise a ‘salary’ but they can not remove an employee’s minimum conditions and entitlements as per the National Employment Standards. The annual salary can not be less than what the employee would receive if paid as per their relevant award entitlements and many awards specify an above award rate percentage that must be applied to annualise a ‘salary’.
Selecting a salary because it seems about right is not the way to go, if unsure seek advice, getting it wrong could mean an investigation and/or prosecution. Take advantage of the online tools mentioned above and determine your minimum obligations and use this as the basis to determine an appropriate salary.