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For all users who have installed an Award or created their own rule sets, you’re going to want to read this!

When assigning Employment Agreements and/or Pay Rate Templates against an employee, the hourly rate of pay was locked. This meant the process wasn’t flexible enough to deal with the scenario of an employee being paid a higher hourly rate than that contained in the Award.

The only solution here was to either:

  1. create a new Pay Rate Template and Employment Agreement, or
  2. skip that part altogether and just manually add the rate and then assign the Pay Condition Rule Set.

So what is the new simplified process?

As you know, Employment Agreements and/or Pay Rate Templates are assigned against an employee in their Pay Run Defaults screen. From this screen, you will now see an “Override pay rate” checkbox next to the ‘Pay Rate’ field:

Selecting that checkbox will convert the pay rate field to an editable field. You are then able to enter the actual hourly rate paid to the employee:

You can also enter a rate of pay that is lower than the Award, for eg if the employee is under a Supported Wage System. In this instance, you will notice the following warning appear:

The system will still allow you to apply a lower rate. The warning is more just to highlight the scenario in case it was done in error.

This new process basically eliminates the need to create additional Employment Agreements and Pay Rate Templates. Rather, you can assign the Award’s Employment Agreement (based on the employee’s classification level and employment type) and then just override the rate!

How do linked Award pay categories interact with the new pay rate?

As you know, one of the benefits of installing a Modern Award through KeyPay is the automatic interpretation of employee timesheets. You can also see the full breakdown of each pay category for an employee in their Pay Rates screen.

Upon overriding an award rate of pay, the linked pay categories will “re-calculate” based on the employee’s new pay rate. So, using the example above where the hourly rate was overridden to $23.50 per hour, the employee’s linked pay categories automatically calculate as follows:

You are also able to override the pay rate from this screen. The rate entered here will update the pay rate stored in the employee’s Pay Run Defaults screen.

What happens to overridden pay rates when installing award updates?

It is extremely important to be aware of what happens during this process.

Any employee’s hourly rate that has the “override pay rate” checkbox ticked will be excluded from any Award pay rate updates.

When you go through the process of applying updates or reinstalling the Award, a list of affected employees will be displayed, as per below:

This list is provided to the user to easily identify who the affected employees are. Any pay rate changes for these employees will have to be done manually.

To clarify, any changes or updates made to pay conditions rules will apply to the employees. It is only the employee’s hourly rate that will not update.

Other interesting tidbits

This feature will be released on 11 January and is available to all subscribers.

All feedback is welcome and appreciated. You can leave us a comment below or send an email to support@yourpayroll.com.au.

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