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Annualised salary record keeping explained

9th March 2020

Many employers have become aware and concerned about the new record keeping requirements for certain employees under annualised salary arrangements.

The new record keeping rules, which commenced on 1 March 2020, do not affect all salaried arrangements. For the electrical contracting industry, the most likely workers affected are those under the Clerks – Private Sector Award 2010 and the Manufacturing and Associated Industries and Occupations Award 2010.

These new award clauses will not affect most managers and professional employees. The Electrical, Electronic and Communications Contracting Award 2010 is excluded from this list. Review the full list of affected awards.

It should also be noted that not all salaries are ‘annualised salary arrangements’. To be considered as such they need to incorporate some other component, in addition to the weekly wage, such as allowances, overtime rates and penalties and/or annual leave loading.

It is in cases where the salaries that include undeclared or ambiguous overtime expectations that employers are most likely to have to take extra steps to capture records about the additional hours worked.

For example, if an administration employee is receiving an annualised salary of $65,000 and their contract of employment states that they are required to ‘reasonable additional hours in order to fulfil the requirements of their role’, does not express what these hours are likely to be, and/or is silent about working additional hours but they do so in practice. This employer will need to comply with the requirements of clause 17 of the award to capture those extra hours and ensure the worker is not disadvantaged against the award.

Alternatively, an administration employee who is receiving an annualised salary of $65,000 and their contract of employment states that they are required to do 2 hours of overtime per week (making their working week a 40-hour week), and the value of leave loading has been incorporated into the salary; has already complied with their obligations under these new provisions.

There have been reports that these new obligations are increasing award complexity and that employers are abandoning the use of salaried arrangements for their workers. MEA recommends members consider the coverage of these arrangements and how their remuneration has been structured in their employment contract before taking any steps to abandon their use.

If you need assistance with this consideration, would like to implement an employment contract or have questions about the application of certain awards to your workers please contact the Workplace Relations team on 1300 889 198.

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