Published July 2022
If you’ve ever had trouble finding different pay rates, allowances and entitlements in a Modern Award, rest assured you are not alone!
In this Quick Guide, we introduce you to Pay Guides – the documents that exist for each Modern Award providing a simple table of entitlements for each classification and employment type (full-time, part-time, casual, apprentices etc).
Given that the Fair Work Ombudsman continues to focus its attention on employer compliance, and in particular, underpayments, it is important employers do everything they can to pay their people properly. Familiarising yourself with the Pay Guides applicable to your team is one good step in the right direction.
If you’re looking for a more comprehensive guide to paying employees properly or you’re not sure where to start, check out our other Quick Guide here.
INTRODUCTION TO PAY GUIDES
All employees working in Australia are entitled to a minimum wage. This is the minimum amount an employee can be paid for the work they perform.
For most employees (who are not covered by a registered agreement), the minimum wage is set by the Modern Award that covers their industry or occupation. Awards cover many different industries and occupations so it’s important to get it right. Each Modern Award contains several different sections outlining the entitlements for employees, however, if you’re not familiar with how they are laid out, it can be easy to miss things. This can easily lead to employees being inadvertently underpaid.
This is where the Fair Work Pay Guides become your new best friend – they provide a summary of the current minimum pay rates, allowances and entitlements for each award, making it easy to see the different pay rates for each classification. They also cover overtime, penalty rates, and travel and shift work payments, where applicable.
The best example of why this is important is one we see almost every week – under the Building & Construction General Onsite Award, there is an industry allowance that is payable to all employees covered by this award under the Allowances clause. However, if you only look at the Minimum Rates clause (which is what most people do when they are looking for pay rates) then you will miss the allowance and potentially underpay your employees by over $50 per week.
In comparison, the Pay Guide specifically notes that the rates include the industry allowance so by using the Pay Guide, you’re sure you are using the correct entitlements and it’s easier to read as well!
They are also helpful in scenarios where a rate is expressed as a percentage of another rate type, which is common for juniors, apprentices and some allowances. In this case, there’s usually no need to complete a manual calculation because the Pay Guide will have already done it for you.
NAVIGATING THE PAY GUIDES
The pay guides contain multiple tables listing all of the current minimum pay rates, allowances and entitlements for full-time, part-time, and casual employees in an award.
Before you use the Pay Guide, be sure to check the ‘published’ date and ensure it has been published in the current financial year. Remember that Award rates and many entitlements increase every year so if you are looking at an older guide, it will not contain the current and correct information.
To use the Pay Guide, simply navigate to the table that is relevant to the scenario you are investigating (for example, full-time adult employee), and follow the row and column titles to find the applicable entitlements.
Some employees have a different minimum entitlement depending on their employment type, age, or work capacity and these are itemised in the Pay Guide if they apply to the Award. For more information about pay for these employees, visit the Fair Work Ombudsman.
WHAT ABOUT ENTERPRISE AGREEMENTS?
If your employee is covered by an enterprise agreement, check the agreement for the minimum pay rates. You can find enterprise agreements on the Fair Work Commission’s website.
Employers should also remember that Award rates increase every year, and you must ensure that the Award rates don’t ‘leapfrog’ the enterprise agreement rates. Where they fall behind, EA rates should be increased to (at least) match the new Award minimum rates.
So, for employers with enterprise agreements, the Pay Guides are also a useful tool.
It is crucial for employers to understand their obligations and continuously check the pay guide instead of only looking at the Award and assuming that only the minimum rate applies.
For more guidance about this update, or to find out how Edwards HR can support your business, contract our team today on 07 3568 0866.
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