End of financial year is a significant time for SMEs and with one of the most complex workplace relations systems in the world, it is essential that business owners stay updated and compliant with the changes that come into effect on, or after 1 July 2017.
Recent research conducted by Union NSW into migrant work conditions found that four in five jobs were paying below the national Award rate, which means 80 per cent of jobs aren’t paying the legal minimum wage, particularly for people whose first language isn’t English.
Wage reviews and Award updates
Each year, the Fair Work Commission (FWC) reviews the National Minimum Wage and base pay rates under Awards with changes to be implemented on the first full pay period on or after 1 July 2017.
While there are different base rates for different job types under Awards, each of these stems from one core minimum wage, which all businesses in Australia must abide by. All workers regardless of nationality are covered by this National Minimum Wage, and casual workers must also receive at least 25 percent casual loading.
Employers must be across any changes and updates to wages and Awards that are effective 1 July 2017 and ensure that these are applied in the first payroll of this financial year.
A reduction to public holiday penalty rates under some Awards will take effect on 1 July 2017.
As for Sunday penalty rates, one of the options proposed by the FWC was to phase in the reductions through a series of annual adjustments on 1 July each year (while the date is not yet confirmed, employers need to be ready) to coincide with any increases in Modern Award minimum wages arising from Annual Wage Review decisions.
If a business has employees covered by the Fast Food Industry Award 2010 (Fast Food Award) or the Restaurant Industry Award 2010 (Restaurant Award), there is a change coming to the span of hours on which the late night/early morning penalty rates are payable.
The FWC delayed the introduction from March until 1 July, meaning it will coincide with the reduction of public holiday penalty rates under the following Awards:
- Hospitality Industry (General) Award 2010
- Restaurant Industry Award 2010
- General Retail Industry Award 2010
- Fast Food Industry Award 2010
- Pharmacy Industry Award 2010
Worker underpayment on the rise
According to Stephen Clibborn, a lecturer at the University of Sydney Business School and associate editor of the Journal of Industrial Relations, underpayment of workers was on the rise.
“The last two decades, we’ve had a large increase in temporary migration and they’re also concentrated in large numbers in certain areas, such as in the cities, and these are often vulnerable workers,” Dr Clibborn said in a media interview.
Where to from here?
Employers need to listen out for announcements and visit the FWC and Fair Work Ombudsman websites for updates.
Once they are available, employers need to ascertain what the new pay rates are for their employees, be that via the government body websites or through tailored advice from a workplace relations specialist, and ensure that they are paying their employees in accordance with these new rates.
Employers of visa holders must review wage decreases carefully and seek advice on the impact of lowering wages for their visa holder population particularly where the visa holder is entitled to a guaranteed salary that is higher than the Award rate.
As always, it is important that employers ensure record keeping aspects, such as rosters and pay slips, are in order.
In relation to the reduced penalty rates on public holidays, it is not necessary to pass on this reduction to employees. Employers may choose to continue paying their employees at the same rate as they were before, provided this is above the minimum set by the Modern Award.
Source: Hospitality Magazine.