5 changes to awards and minimum wage that impact your payroll

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At the beginning of July, three major changes to awards and the minimum wage came into effect that may impact your business, especially if you have award covered employees. Likewise, there are two other changes on the near horizon that you need to be aware of so you can make the necessary adjustments to your payroll and HR systems.

1. Minimum wage increases 

On 1 July 2018, the minimum wage in all awards increased by 3.5% to $18.93 per hour or $719.20 per week based on 38 hours.

If you have employees who are covered by an award and are paying at or close to the minimum wage, it is important to increase your employees’ minimum wages in line with this decision by the Fair Work Commission.

Likewise, if you have an enterprise agreement in place, it’s critical to ensure the base rate of pay in the agreement does not result in your employees being paid less than the relevant award pay rate or the national minimum wage.

2. Increase to high-income threshold

On 1 July 2018, the high-income threshold increased from $142,000 to $145,400. This threshold refers to the highest salary an employee can earn and still be protected by unfair dismissal laws.

3. Maximum compensation for unfair dismissal increases

Increasing to $72,700 (from $72,000), this compensation limit is the maximum compensation available to your employees if successful in an unfair dismissal claim.

Changes On the near horizon

4. Flexible working

The Fair Work Commission has recommended changes to awards to incorporate a term related to flexible working arrangements.

The proposed new clause has the potential to pose greater obligations on HR professionals around consultation with your award covered employees who are seeking flexible arrangements. And while the proposed clause retains your right of refusal on reasonable business grounds, you will be required to provide more information if you refuse the request.

In addition, casual employees with at least six months’ continuous service will be able to access these flexible working arrangements if they have parental or carers’ responsibilities.

5. Unpaid family violence leave

The Fair Work Commission has also ruled that all employees covered by awards will be entitled to five days of unpaid leave if they are affected by family or domestic violence. The terms of this new clause are currently being drafted and are expected to be finalised in the coming weeks.

Avoid HR and payroll compliance fails

As we mentioned in our previous post on payroll compliance fails, with ongoing changes to awards, you need be skilled at navigating around your compliance obligations. You need to be mindful of these new and upcoming changes to awards when determining wages, flexible working arrangements, leave, and assessing unfair dismissal eligibility. Remember, penalties for non-compliance are stiff, at up to $126,000 if you fail to meet your obligations.

We will keep you posted on the near horizon changes as and when the details are finalised.

FlarePay

In the meantime, why not take the time now to see what a fully-integrated Payroll and HR solution could do for your company in terms of streamlining HR and payroll compliance. Book in for a demo of FlarePay, our powerful, yet easy-to-use Payroll software.

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