Hospitality and Restaurant Industry Awards
As of 1 September 2022, employees who are paid 125% or more via annualised wage arrangements under clause 24 of the Hospitality Award and Clause 20 of the Restaurant Industry Award will need to be paid an additional amount when an employee works in excess of the “outer limits” below:
- 12 hours overtime per week averaged over the roster cycle; and/or
- 18 penalty hours per week averaged over the roster cycle (excluding 7pm to midnight in the Hospitality Award and 10pm to midnight in the Restaurant Award).
Health Professionals and Support Services Award
As of 9 May 2022, annualised wage arrangements will be available by agreement to Level 2 and above in the Health Professionals Stream and Level 8 and above in the Support Services stream as per below:
X.1 Annualised wage instead of award provisions
(a) An employer and a full-time employee may enter into a written agreement for the employee to be paid an annualised wage in satisfaction, subject to clause X.1(c), of any or all of the following provisions of the award:
(i) clause X – Minimum weekly wages;
(ii) clause X – Allowances;
(iii) clause X – Overtime penalty rates
(iv) clause X – Weekend and other penalty rates; and
(iv) clause X – Annual leave loading
(b) Where a written agreement for an annualised wage agreement is entered into, the agreement must specify:
(i) the annualised wage that is payable;
(ii) which of the provisions of this award will be satisfied by payment of the annualised wage;
(iii) the method by which the annualised wage has been calculated, including specification of each separate component of the annualised wage and any overtime or penalty assumptions used in the calculation; and
(iv) the outer limit number of ordinary hours which would attract the payment of a penalty rate under the award and the outer limit number of overtime hours which the employee may be required to work in a pay period or roster cycle without being entitled to an amount in excess of the annualised wage in accordance with clause X.1(c).
(c) If in a pay period or roster cycle an employee works any hours in excess of either of the outer limit amounts specified in the agreement pursuant to clause X.1(b)(iv), such hours will not be covered by the annualised wage and must separately be paid for in accordance with the applicable provisions of this award.
(d) The employer must give the employee a copy of the agreement and keep the agreement as a time and wages record.
(e) The agreement may be terminated:
(i) by the employer or the employee giving 12 months’ notice of termination, in writing, to the other party and the agreement ceasing to operate at the end of the notice period; or
(ii) at any time, by written agreement between the employer and the individual employee.
X.2 Annualised wage not to disadvantage employees
(a) The annualised wage must be no less than the amount the employee would have received under this award for the work performed over the year for which the wage is paid (or if the employment ceases or the agreement terminates earlier, over such lesser period as has been worked).
(b) The employer must each 12 months from the commencement of the annualised wage arrangement or, within any 12-month period upon the termination of employment of the employee or termination of the agreement, calculate the amount of remuneration that would have been payable to the employee under the provisions of this award over the relevant period and compare it to the amount of the annualised wage actually paid to the employee. Where the latter amount is less than the former amount, the employer shall pay the employee the amount of the shortfall within 14 days.
(c) The employer must keep a record of the starting and finishing times of work, and any unpaid breaks taken, of each employee subject to an annualised wage arrangement agreement for the purpose of undertaking the comparison required by clause X.2(b). This record must be signed by the employee, or acknowledged as correct in writing (including by electronic means) by the employee, each pay period or roster cycle.
X.3 Base rate of pay for employees on annualised wage arrangements
For the purposes of the NES, the base rate of pay of an employee receiving an annualised wage under this clause comprises the portion of the annualised wage equivalent to the relevant rate of pay in clause X—Minimum weekly wages and excludes any incentive-based payments, bonuses, loadings, monetary allowances, overtime and penalties.
Marine Towage Award
As of 9 May 2022, employees who are paid 140% or more via annualised wage agreements under clause 14.2 of the Marine Towage Award will be paid an additional amount when an employee works in excess of the “outer limits” below:
- For more than 20 penalty hours worked per week averaged over the pay period or roster cycle; and/or
- For more than 15 overtime hours per week averaged over the pay period or roster cycle.
Common Law Set-off clauses
The FWC has made it clear that employers can still choose to use a common law set-off clause via an annual salary. This will be paid in full satisfaction of any monetary entitlements the employee would have received under the Modern Award in any particular pay period. You must still however comply with the pay record provisions of the Fair Work Regulations 2009 and ensure there are no underpayments in any particular pay period.
Please contact your BetterHR advisors to assist you in drafting your contracts if you wish to provide an annual salary to your employees.