There's a lot of attention in the media at the moment about the new Fair Work changes to the Hospitality (HIGA) and Restaurant (RIA) awards for employees on annualised wage arrangements, coming into effect on September 1, 2022.
Read on for a summary of the key recommendations communicated by Fair Work and how Deputy can support your business through these changes.
As of 1 September, 2022, employees on annualised wage arrangements are required to sign a written agreement that outlines their annualised wage and outer limits.
To support with this change, an employee contract can be uploaded to Deputy and signed by new hires using Deputy Employee Onboarding, and will provide a digital record of the arrangement for both the employee and employer.
Fair Work have outlined the inclusions for written agreements on their website. A downloadable annualised wage agreement template has also been provided by Fair Work.
Additional record-keeping requirements
As of 1 September, 2022, employers are required to keep a record of their employees’ start time, finish time, and any unpaid breaks they took during their shift. These records have to be signed or acknowledged by the employee at the end of each roster or pay period.
Within Deputy, employees on annualised wage arrangements are able to submit timesheets to record the hours they work, including unpaid breaks. Once this information is captured, Deputy keeps a permanent digital record of the hours worked. Deputy can also notify employees if they forget to submit a timesheet so you’re never left without an audit trail.
Proactively manage penalties and overtime
Fair Work has set the maximum amount of hours that attract overtime or penalty rates that can be included in an annualised wage arrangement. If the employee works more than these hours in a roster period, they must be paid separately at the relevant award rate, in addition to their regular wage. These maximum hours are known as outer limits.
As of 1 September, 2022, Fair Work has set these for HIGA and RIA as:
An average of 18 penalty hours per week (excluding evening work)
An average of 12 overtime hours per week
Evening work is not counted towards these limits. Evening work is defined as:
Work between 7pm and midnight, Monday to Friday (if under the Hospitality award)
Work between 10pm and midnight, Monday to Friday (if under the Restaurant award)
Deputy offers a number of tools that can help you control and manage how many hours your employees are working and when. When setting annualised wage rates, Fair Work recommends considering your employee’s work patterns, which can be easily set up in Deputy using our Agreed Hour tool. The Deputy Agreed Hour tool allows you to set a recurring pattern for employees that you can schedule in just one click, as well as monitor when they exceed these hours.
If you do have regular patterns, an ‘ideal’ schedule for your business can be saved using the Deputy Schedule Templates or the Deputy Agreed Hours feature, which will give you an easy way to roster only for exceptions.
Finally, Deputy Stress Profiles allow you to set scheduling rules for your staff to manage their hours worked and overtime.
Review and reconcile annualised wage arrangements
As part of the Annualised Wage changes, Fair Work has stated that employers need to review and reconcile annualised wage arrangements at least annually, when the arrangement ends or, when the employment ends.
Having a digital record of your employees’ timesheets enables Deputy to support you with Fair Work’s review and reconciliation requirement.
The Deputy Pay Comparison tool helps you to calculate what employees on annualised wage arrangements would have received if they had been on a different rate (including the industry awards), and allows you to export the following information about your team members:
A record of what they earnt based on their Deputy pay rates
A record of what the award pay would have been if they had been on that rate
The variance between these rates
A breakdown of overtime and penalty hours against your nominated outer limits
It’s worth noting that Fair Work has recommended that the employer must compare what has been paid to the employee (via an annualised wage) with what they would have been entitled to had they been paid under their relevant classification in the Hospitality or Restaurant award. If there is a shortfall, the employee must be remunerated the difference within 14 days of completing the reconciliation.
Annualised Salary clauses are complex, and can be handled in a number of ways. It is recommended that you consult your legal and payroll advisers to confirm any discrepancies and how to discharge your legal responsibilities.
Deputy is here to help
Navigating evolving award changes is complex and cumbersome.
To help you get up and running for Fair Work Annualised Wage changes, lean on Deputy to upload employee annualised wage arrangements, start tracking your salaried employees hours and timesheets in Deputy, and finally, use the pay comparison report as a tool to help you manage the award requirements.
Important note: The information in this document is provided for informational purposes only and does not constitute legal advice.