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Phasing In Wage Rates Expert Guidance

The latest in WorkplaceInfo’s Pocket Guide to Modern Awards series for employers, Phasing-in wage rates, loadings and penalties, is now available, free of charge to subscribers.

WorkplaceInfo spoke to the series’ author, IR Consultant, Paul Munro, about this important subject.

Why did you decide to write this Guide?

We’ve been getting a lot of questions from subscribers to WorkplaceInfo’s Ask an Expert service, which showed there was a lot of confusion around the phasing-in process of the transitional provisions of modern awards.

Was there something common to all this confusion?

Yes, there was — employers are trying to work out what rates to apply. I wrote the Guide to try and explain that the process of working out the wage rates is the same for all awards, it’s just the actually monetary amounts that are different.

As soon as they get to grips with the principle of the phasing-in process, they can then apply this to individual employee wage rates.

The new wage rates, loadings and penalties don’t come in until 1 July 2010. Should employers be doing anything right now?

Yes, they need to audit their employees who are covered by modern awards — and they should start now. Not only do they need to be ready for new rates of pay, but they must have it firmly in their minds which of the new award classifications apply to their employees. The classification determines the wage rates and it can be difficult in some cases to determine which is the correct one.

Can you suggest a process for employers to follow?

It’s really important for employers to audit all their employees — whether they are currently under an award or an agreement.

The crucial first step is to look at the classifications in each modern award and determine which ones apply to their employees. This is something that only the employer can do — you need to look at the work the employees do and compare it to the description in the modern award.

Next, as soon as you have classified each employee, you need to list their current award wage rate, as it applied at 31 December 2009.

The next step is to actually understand what you need to do once the new modern award wage rates start on 1 July. That’s where the new Pocket Guide, Phasing-in wage rates, loadings and penalties, comes in. Read this Guide, go through the examples and work out how to apply the transitional provisions to each employee’s current wage rate. IMPORTANT: you will have to do this individually for each employee.

Use what you’ve learned about phasing-in and compare the current wage rate to the modern award rate for that employee classification.

What about employees who are covered by agreements?

Again, compare the work that those employees do to the classifications in the modern award. You will need to do this for two reasons: The transitional wage rate in the modern award overrides the wage rate in any agreement because it forms part of the basic minimum standards that apply to all employees. If the wage rate in the agreement is lower than in the modern award, you will need to give your employees a pay rise on 1 July 2010.

Some employees may have been award-free prior to the introduction of the Fair Work Act, but are now covered by a modern award (for example, merchandisers in Queensland and Western Australia). You need to know whether an award now applies to such employees.

What should an employer do, if they get stuck in this process?

Well, as I said previously, start now, work through the Guide and allow plenty of time. If you really get stuck, then speak to your Employer Association,or contact Fair Work Australia.

Phasing-in wage rates, loadings and penalties — available now!

Article sourced from Workplaceinfo, A daily Bureau service for HR & IR professionals. For a free 14 day trial, contact us on "info@wrscentre.com.au" or call Craig on 0450 747337.
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