Annualised Salaries & Unauthorised Overtime
- Suzanne Johnstone
- Mar 12, 2020
- 3 min read
The Fair Work Commission commenced the “Review of annualised salary provisions in modern awards” back in 2016. Recently the decision was made to change annualised salary provisions under 22 Modern Awards from 1 March 2020 on-wards.
“On 12 February 2020, the Fair Work Commission (the Commission) made determinations that added new rules about annualised wage arrangements (also known as annual wage arrangements) in the Horticulture Award 2010 MA000028 and Pastoral Award 2010 MA000035, and changed the existing rules for the following awards:
The new rules start from the first full pay period on or after 1 March 2020. So for example, if an employee's fortnightly pay starts on Thursday, 27 February 2020, these new rules won't start until Thursday, 12 March 2020.
The Commission also plans to update the following awards with new rules, but hasn’t set a timeframe yet:
As a result of this new provision, any Employer paying Salaried Employees under these affected Modern Awards must also:
◼ record starting and finishing times;
◼ record unpaid breaks taken;
◼ have Salaried Employees acknowledge the record of hours they’ve worked is correct by signing in writing or electronically at the end of every pay period or roster cycle; and
◼ undertake an annual reconciliation.
I’ve worked within the HR, Commercial Recruitment, Industrial Relations & Payroll space for over 20 years. And during that time, I’ve had to conduct a multitude of Payroll Reconciliations, however when it came to Salaried Staff – not so easy...
There were a number of challenges, however the 2 biggest were TIME KEEPING and UNAUTHROISED OVERTIME.
Historically, a salaried employee has never kept a record of the hours they work. They only start doing this when they feel that they are being overworked and underpaid. And the hours they worked had to be quantifiable.
The new provision of recording starting and finishing times addresses the TIME KEEPING.
Employment Contracts should include a clause for “Ordinary Hours of Work”.
The Fair Work Ombudsman Letter of Engagement template includes the reference
“plus any reasonable additional hours that are necessary to fulfil your duties or as otherwise required by the employer.”
But, what about the UNAUTHORISED OVERTIME issue?
What comes to mind is the scenario of someone working through their Meal Break. If the Employer did not instruct them to work through their Meal Break, but the Employee chose to eat their lunch at their desk to finish off something they were working on, this is a VOLUNTARY action, not an instruction. An example of UNAUTHORISED OVERTIME.
What about staying back at the end of your shift or coming in before your shift is scheduled to start in order to get ahead of your To Do List?
Also, how do you gauge what the Employer believes is a “reasonable amount of overtime”?
Is the Salaried Staff member working a “reasonable amount of overtime”, as per their Employment Contract, or are they VOLUNTARILY working additional hours, in order to “fulfil their duties”?
Not only Employment Contracts, Time & Attendance and Payroll procedures need to be updated, but a review of a business Policies and Procedures also needs to happen. Does your Overtime Policy clearly state what AUTHORISED OVERTIME is?
QUESTIONS YOU NEED TO ASK:
Is your business affected?
Are you compliant?
Concise Advice & Business Solutions Pty Ltd is an “Industrial Relations, Payroll, Time & Attendance and HR" Consulting and Outsourcing Solutions Provider.
Comments