Published June 2023

 IR ALERT – Significant Changes to the Professional Employees Award

The Fair Work Commission has recently reviewed the Professional Employees Award 2020 which resulted in changes to the coverage clause, hours of work, overtime, time in lieu and penalty rates clauses.

This Award appliers to employers in the IT Industry, quality auditing industry and telecommunications services industry as well as employers of professional scientists, professional engineers, and medical researchers.

These changes take effect from the first full pay period commencing on or after 16 September 2023.

WHAT HAS CHANGED?

The award will now require employers to pay employees “compensation” for hours of work which would generally attract specific penalty rates or overtime pay. Previously no specific rates were noted. Below are the key changes:

• Ordinary hours of work will be set at 38 hours per week with the right to request that full-time employees work overtime as long as the additional hours are reasonable (per section 62 of the Fair Work Act 2009 (Cth)).
• An employer and employees will be able to agree to the accumulation of TOIL (Time Off in Lieu) rather than pay overtime.
• A penalty rate of 125% will be payable to employees that work any hours before 6:00am or after 10:00pm, Monday to Saturday. For casual employees, this will be in addition to their casual loading.
• A penalty rate of 150% will be payable to employees that work on a Sunday or public holiday. For casual employees, this will be in addition to their casual loading.
• Employers will be required to keep records of hours worked by certain employees:

o   In excess of 38 hours per week.

o   Before 6:00am and after 10:00pm, Monday to Saturday.

o   On a Sunday or public holiday.

In addition to these changes, the Fair Work Commission will also make the following changes to the Award:

• Employers may agree with employees that the employee’s ordinary hours of work will be averaged over a period of up to 13 weeks.
• Employees who perform remote work outside of ordinary hours must maintain and provide time sheets to their employer, specifying the time at which they commenced and finished the remote work as well as describing the work they undertook. These time sheets are to be providing to the employer ‘within a reasonable period of time after the remote work is performed‘.

        Schedule A Classification Structure and definitions clause has also been updated to clarify that “An employee performing professional engineering duties, professional scientific duties, professional information technology duties or quality auditing must be classified in one of the following classifications provided that the employee is not employed in a wholly or principally managerial position.”

The above changes will not apply to employees who are paid a salary that is at least 25% higher than the minimum annual wage for their relevant classification under the Award.

WHAT DOES IT MEAN TO EMPLOYERS?

To ensure compliance, employers should:

• Understand these changes ahead of their implementation in September.
• Review employee compensation/ remuneration and classification levels to ensure that it is adequate and high enough to meet the new penalty rate and overtime entitlements under the Award.
• Review arrangements with employees and update employment agreements as required to reflect the changes to the Award (TOIL, overtime, and penalty provisions) and refer to the new entitlements where required.
• Review and update existing record keeping and overtime practices within the business to ensure compliance.

WHERE CAN I GET HELP?

Compliance is a significant area of focus for the Fair Work Commission so it’s important you get it right. Please reach out to the team at Edwards HR if you require any assistance with preparing for these changes.