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The new enhanced industry allowance will remove and replace 52 complex industry, disability and expense related allowances, with an enhanced industry allowance. This will immediately affect all employees employed under the Onsite Award, as it will impact the minimum hourly rates of pay.
Currently under the Onsite Award, you’re required to pay industry, tool, and special allowances, in addition to an employee’s base rate of pay.
Additionally you may also be required to pay other allowances, which are incidental and depend on the nature of the work the employee is carrying out. For example, a tiler may be entitled to a tile cutting allowance for a few hours of a working day when he or she is cutting tiles for a job.
Traditionally the application of these other allowances, known as disability allowances has been difficult for employers to manage, due to the changing nature of work, and the potential for numerous allowances to apply at once.
The industry allowance is paid in addition to an employee’s weekly rate of pay, and is dependent on the work carried out. The allowance is broken into two categories:
The key to knowing which industry allowance applies is determining whether or not the works fall within the definition of the residential building and construction industry.
Generally, you will no longer be required to pay disability allowances which are based on the type of works your employees are doing (there are some exceptions to this, as detailed below). To compensate for any loss associated with the removal of these allowances, you will be required to pay an enhanced industry allowance, the application of which depends on the type of construction work the employer carries out.
The residential building and construction industry allowance applies when the following activities are undertaken in relation to a ‘single occupancy’ or ‘dual occupancy’ residential building which is less than five storeys:
Key as to whether the residential allowance will apply is determining whether the works relate to a single OR dual occupancy dwelling under 5 storeys. Problematically single occupancy and dual occupancy dwellings are not defined within the Onsite Award.
HIA provides the following guidance:
The residential construction industry allowance will apply to construction works which are:
Importantly these examples will not be exhaustive. We always recommend that where it is not clear if works fall within the scope of this definition, to contact HIA. Understanding of this provision will evolve over time.
It’s not a simple matter of adding the 4.8% or 6% to the employee’s hourly rate, the percentage applies to the ‘weekly standard rate’, which as per clause 3.1 of the Onsite Award, is the weekly minimum wage for Level 3 (CW/ECW 3). Never fear however, HIA will make understanding this process simple through our wage sheets.
Yes, the following allowances remain within the Onsite Award:
From 1 July 2020, the following allowances are no longer applicable under the Onsite Award:
This information is part of a series of updates on the Modern Award changes aimed at assisting members understand the requirements. More information can be found in the articles in the ‘What to read next’ section.
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