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The 1 January 2018 Fair Work changes affecting over a million employees

Fair Work have recently announced some of the most large-scale changes in recent memory to key Modern Awards in Australia. We estimate that these changes can potentially affect in excess of 1 million employees across Australia (based on 2016 Census data). For employers, in many cases, this means an increase in wages paid to casuals through overtime and more flexibility around agreed hours for part time workers. Read a summary of these changes below.

Impact on Casual Employees

One of the main impacts are for casual employees to begin receiving overtime in awards where previously they didn’t. Here is a summary of the impact on casual employees across the affected modern awards:

Name of Award Overtime after weekly hours or roster cycle Overtime in excess of daily hours Overtime at a certain time of the day Meal allowance entitlement Minimum hours per day
Fast Food Industry Award 2010 (MA000003) 38 hours per week or average of 38 hours per week over roster cycle 11 hours per day No change Yes No change
Hair and Beauty Industry Award 2010 (MA000005) 38 hours per week or average of 38 hours per week over roster cycle 10.5 hours per day No change Yes No change
Hospitality Industry (General) Award 2010 (MA000009) 38 hours per week or average of 38 hours per week over roster cycle 12 hours per day No change Yes No change
Passenger Vehicle Transportation Award 2010 (MA000063) No change No change No change No change Clarification around 2 hour minimum for bus drivers
Registered and Licensed Clubs Award 2010 (MA000058) 38 hours per week or average of 38 hours per week over roster cycle 12 hours per day No change Yes No change
Restaurant Industry Award 2010 (MA000119) 38 hours per week or average of 38 hours per week over roster cycle 12 hours per day No change Yes No change
Retail (Baking) Industry Award 2010 [MA000004] 38 hours per week or average of 38 hours per week over roster cycle 11 hours one day of the week and 9 hours for the remaining days No change Yes No change
Retail (General – Extended Hours) Industry Award 2010 [MA000004] 38 hours per week or average of 38 hours per week over roster cycle 11 hours one day of the week and 9 hours for the remaining days Span of hours prescribed by the award Yes No change
Retail (General – Shift worker) Industry Award 2010 [MA000004] 38 hours per week or average of 38 hours per week over roster cycle 11 hours one day of the week and 9 hours for the remaining days No change Yes No change
Retail (General) Industry Award 2010 [MA000004] 38 hours per week or average of 38 hours per week over roster cycle 11 hours one day of the week and 9 hours for the remaining days Span of hours prescribed by the award Yes No change
Retail (Newsagent) Industry Award 2010 [MA000004] 38 hours per week or average of 38 hours per week over roster cycle 11 hours one day of the week and 9 hours for the remaining days Span of hours prescribed by the award Yes No change
Wine Industry Award 2010 (MA000090) No change No change No change No change Reduced to 2 hours if pruning or harvesting and get unexpected weather

Part time employees

The other major implication of the review by Fair Work was the interpretation of overtime for part time employees. The specifics vary across each award, but as a general theme the following were applied:

  • When hiring a part time employee, you agree the guaranteed hours (e.g. how many minimum hours you’ll receive each week) and the available hours (when you can and cannot be rostered each week).
  • You can exceed the guaranteed hours without applying overtime. Overtime clauses will normally be applied to part time employees the same way as for full time employees e.g. over 38 hours per week, over maximum hours per day, outside spread of hours per day
  • If guaranteed hours continue to be exceeded for a period of time, the award may mandate that the guaranteed hours be increased e.g. every 12 months.

The following awards provided changes to part time employees:

  • Hospitality Industry (General) Award 2010 (MA000009)
  • Registered and Licensed Clubs Award 2010 (MA000058)
  • Restaurant Industry Award 2010 (MA000119)
  • Pastoral Award 2010 (MA000035): Broadacre Farming and Livestock Operations
  • Social, Community, Home Care and Disability Services Industry Award 2010 (MA000100)
  • Road Transport (Long Distance Operations) Award 2010

When do these changes come into effect?

These changes affect the first full pay period on or after 1 January 2018. This means you need to apply the updates we’ve published after you’ve completed your last pay run which contains shifts being paid during December 2017 or earlier.

Existing KeyPay customers will see a notification on the home screen to prompt them to apply updates such as the one shown below:

After you’ve applied the updates, you will need to recalculate your rostered shifts made past 1 January where the new pay conditions come into effect. To do so, navigate to the correct week or fortnight in rostering and click ‘recalculate’ as shown below. Repeat this process for any future dates containing rostered shifts.

What employers need to be planning

  • It will be far less clear and more difficult to manually roster and cost casual employees. How do I reliably cost and understand overtime hours ahead of time when rostering?
  • Will it be costlier to pay casual employees excessive hours?
  • Will it be more cost effective to provide hours for part time staff above their agreed hours but less than 38 hours per week (or average per roster cycle)?
  • Are my employment contract templates for part time staff reflecting these new changes?
  • How often should I perform a review of part time employees and their guaranteed versus actual hours?
  • Am I currently compliant or am I susceptible to fines and penalties from Fair Work?
  • What systems and processes do I have in place to manage the ongoing changes to Modern Awards?

How KeyPay can help

KeyPay provides an all in one rostering, time and attendance, award interpretation and payroll solution that allows you to pay your staff compliantly based on pre-built modern award templates. All of the modern awards above are available to install and maintain on our KeyPay Advanced Subscription.

Not only do you produce a Fair Work payslip which is compliant with your modern award, but all the shifts are automatically interpreted using our rules engine

 

But while you are comfortable on pay day, you also need to know your costs at the time you can control them – at the rostering stage. KeyPay builds modern award interpretation into the roster to help you spot the anomalies. Here’s an example of a roster applying a budget and assisting us to identify overtime for a casual employee.

Next steps

If you haven’t already, take our advanced features for a spin by heading to keypay.com.au or contact us at support@yourpayroll.com.au.

 

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