Changes to record keeping requirements for annualised wages
New record keeping rules
From 1 March 2020, new record keeping requirements apply to employers under certain new modern award annualised wage clauses for employees paid an annualised wage.
What are the requirements?
Employers must advise the full-time employee of the requirements of the annualised wage arrangement and keep a record of:
(a) the annualised wage;
(b) the award the annualised wage satisfies;
(c) how the annualised wage has been calculated including each component of the annualised wage including overtime and penalties; and
(d) the ‘outer limit’ of ordinary hours and overtime hours that may be worked without requiring a payment more than the annualised wage.
The employer must keep a record of all start and finish times and unpaid breaks, which must be acknowledged as correct in writing by the employee for each pay period.
Annual review must be conducted
The employer is also required to conduct an annual review to ensure the employee was paid no less than would have been paid under the award for the actual hours worked and to pay any shortfall within 14 days.
Changes create new obligations
Most requirements under the new annualised wage clause are new obligations that are not required under the current annualised wage clauses in the relevant awards.
Different requirements for contractual salary arrangements
If a contractual salary arrangement applies, employers need not comply with the requirements under the new annualised wage clause. However, employers must ensure that:
(a) the employee’s contract of employment contains an appropriate set-off clause stating what the salary covers; and
(b) the amount actually paid to the employee each pay period is not less than the employee would receive under the applicable modern award.
Non compliance risks underpayment claims
If employers do not comply with the requirements for full-time employees paid an annualised wage or pay contractual salaries that pay award-covered employees for actual hours worked, they could be at risk of underpayment claims by employees.