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Changes to the Clerks Award

December 10, 2019

Do you pay your clerical employees an annual salary? If you do, you need to be aware of a recent decision by the Fair Work Commission (FWC) concerning annualised salary arrangements.

The FWC has recently conducted a review of annualised salary arrangements under 19 modern awards, including the Clerks Private Sector Award 2010 (Clerks Award). As a result of the review, the FWC has determined new clauses for these awards.

The new clause for the Clerks Award will impose greater requirements on employers where engaging employees under an annual salary as opposed to a defined hourly rate under the Award, to ensure employees are not worse off under such arrangements.

The changes are expected to take effect from 1 March 2020.

What are the changes?

The new clause for the Clerks Award requires you to:

  • Advise employees in writing and keep records:
    • Of the provisions of the award which will be satisfied by payment of the annualised wage;
    • How the annualised wage is calculated (providing a breakdown of calculation including overtime and penalty assumptions);
    • The outer limit 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.
  • Make additional payments to employees if excess hours are worked beyond their defined outer limits.
  • Keep records of start and finishing times, and unpaid breaks. The records are to be signed by employees each pay period or roster cycle.
  • Conduct a reconciliation
    • Every 12 months from the commencement of the annualised salary arrangement (or on termination of employment) to calculate whether the employee is better off under the annualised arrangement as compared to the award; and
    • Any shortfall must be paid to the employee within 14 days.

Next steps

As the new clause is yet to commence, now is a good time to look at your payroll, and record keeping processes, as well as consider your current employment arrangements.

HIA will keep members updated as the FWC releases additional material relating to the new clause, including information any potential transitional arrangements (i.e. - transitioning current employees from their current arrangements on to the new arrangements).

It is recommended you’re on the HIA award update list to ensure you obtain any necessary updates.

For any further information or assistance contact HIA Workplace Services on 1300 650 620