19 May Annualised Salaries – 9 out of 10 Employers Get This Wrong
Does your business pay employees covered by an award an annualised salary?
If so, you are not alone. Many businesses do not wish to deal with the administrative burden of calculating weekly pay plus overtime, plus leave loading, plus penalties, plus any number of allowances and entitlements provided within the awards that cover their employees. But, if you get it wrong, you could end up with an even bigger administrative burden complying with a Fair Work investigation.
In 2020-2021 the Fair Work Commission (FWC) conducted more than 4,000 investigations because businesses got it wrong. The consequences of this can be devastating. Apart from the reputational damage from public naming and shaming, last financial year alone the FWC prosecuted 76 businesses for failure to comply with minimum employment obligations. A penalty of up to $66, 600 per contravention can be made.
The top items businesses get wrong with annual salaries include:
- Not paying employees under the correct Award.
- Not checking, understanding and complying with the annualised salary clause in the Award where one is in existence.
- Not advising the employee in writing of the total annualised salary amount and which entitlements have been included.
- Not conducting regular audits against award minimum rates and entitlements.
- Not having time and attendance records in order.
Navigating annualised salary requirements to remain compliant with Fair Work obligations is no easy task. Employers and individuals can face prosecution and even be sent to prison where the FWO reasonably believes the Fair Work Act or Regulations have been contravened, intentionally or not.
Don’t let your business become the next investigation statistic.
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For a copy of our Annualised Salaries Information Sheet, please email us at email@example.com or call 1300 287 360.