Monday 1 March 2021 marks exactly one year since the new annualised salary arrangements were brought into force. It’s also the first day that employers using the arrangements could need to perform their annual reconciliation of their employees’ annual salary vs. award entitlements.
The Fair Work Commission (FWC) requires employers paying annualised salaries to employees under 22 modern awards to prove their compliance in several ways. They must seek employee consent, review employment contracts and update HR and payroll practices to record employee work times, and audit annualised salaries vs. full award wages each 12-months after the employee enters into the annualised wage arrangement, or on the termination of their employment.
The annualised salary arrangements effectively require employers to prove the salaries they pay don’t disadvantage their employees when compared to the award rates for the hours and times they worked. However, these requirements ask many employers if salary annualisation is worth the effort?
Visit our Annualised Salary webpage to access our collection of resources for payroll professionals dealing with the new rules – including our whitepaper Get Ready For Annualised Salary Changes. You can also access the FWC’s schedule of determinations for annualised wage arrangements.