- Published
Why Flat Rates and Salaries Are Catching Heavy Industry Employers Out
In heavy industries, flat rates and salaries are common and often preferred for their simplicity. But here’s the problem, flat doesn’t always mean fair, and paying “above award” doesn’t automatically make you compliant.
We’re seeing more cases where well-meaning employers in transport, construction, mining and manufacturing (and many others) end up underpaying their staff, without even realising it because of how their pay structure is set up.
So, what’s going wrong?
Flat Rate – The Flat Rate Trap
Flat hourly or daily rates might seem generous, but they often fail to meet key Award entitlements, like:
- Overtime (usually after 8 or 10 hours)
- Penalty rates for nights, weekends, and public holidays
- Travel or site allowances
- Living away from home entitlements (common in transport and any FIFO)
Example: A truck driver gets a flat rate of $320 per day. Sounds decent. But if they’re driving 12 hours, that’s around $26/hr – well below the legal rate once overtime, allowances, and penalties are factored in.
Even if your rate sounds high, you need to check how it stacks up against the Award (per shift), not just overall.
Salary – The Salary Set-and-Forget
In most industries, annual salaries are offered to supervisors, engineers, admin staff and operations staff. But here’s where things come unstuck:
- The salary is based on a 38-hour week, but staff are working 50+ hours
- There’s no tracking of hours or reconciliation against the Award
- There’s no written agreement outlining what’s “absorbed” by the salary
- There was no consideration given to overtime, allowances and penalties when the salary was determined
This is where underpayments creep in and they add up fast.
Example: A Site Supervisor is on a $95K salary. Sounds fair. But they’re working 55-hour weeks, sometimes more. Break it down, and they’re earning about $33/hr but the Award says they should be on more once overtime, weekend rates, and allowances are added. This was never factored in when the salary was set and no one is monitoring the hours worked, so the underpayment problem snowballs in the background.
Common Industry Flat Rate & Salary Calculations That We See
Here are some real-world examples that we see too often from heavy industries and other common workplaces practices where flat rates or salaries often miss the mark, putting employers at risk of underpayment claims.
- Commercial Cleaner on a Flat Rate
Paid $27/hour, but occasionally works overtime for bigger jobs or extra tasks. Overtime isn’t always accounted for properly and no allowances are paid.
- Admin Manager on a Salary
On $110K per year but regularly working well beyond the standard 38 hours per week. No clear agreement on what the salary covers in terms of extra hours.
- Picker/Packer on an “Above Award” Flat Rate
Common in warehouses. Paid $28/hour flat while working 45–50 hours most weeks. Overtime and penalty rates often not accounted for.
Remember, every workplace situation is different.
That’s why we tailor our HR consultancy services to your specific needs. We help you review pay structures, create clear agreements, and stay on top of Award rules. Plus, we provide practical training for your managers to ensure your payroll is accurate and compliant. Partner with us to protect your business and your people.
Get in touch with our team today to discuss how we can help.
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