More than 15% of Australian employees are paid based on a modern award but plenty of employers are still non-compliant mainly because awards are complex and interpretations are not always straight forward. Because of this, the new Fair Work Amendment law was introduced to place financial penalties on businesses that breach their obligations to their employees.
Plenty of employers think that paying a base rate above the award rate exempts them from paying other components of the award like allowances or overtime. However, this is false. Paying above the award does not mean you do not need to comply with the other conditions of the modern award. If you do not comply with allowances, overtime or break conditions; you are likely in breach and could be fined unless you have approval from Fair Work.
Most modern awards also include anniversary or age-based rate progressions. Rate for a probation period could be different from a non-probation rate which may change after three to six months – and again after the employee’s anniversary or birthday. It may be difficult to track the changes and failure to update rates can be costly.
Another potential problem is time recording, as employers often only record the total hours worked and do not keep track of the actual shift start and stop times. Incorrect time recording may result in incorrect payments based on the hours worked, which can become an issue if the employer does not have proof of when their employees worked and when they took their breaks. To avoid being in breach, seek professional advice.
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