How can we Mitigate the Cost Impacts of the Latest IR Laws
When read in the context of the latest IR reforms requiring businesses to append the employees’ standard hours and days of the week to their employment contracts, the key requires thinking through.
This, along with the need to track each employee’s acceptance of any change requests to the contracted work time, requires considering the impact of these requirements on the business. Maintaining employee acceptance of changes to their contracted work days and hours is smart.
In summary, it could potentially add a substantial amount to the business wage bill. There are ways around this, but it will require creating a process for requesting and accepting the change’s documentation.
Inzenius has designed a process to provide comfort as we move to the new IR environment.
- Add to each employee contract the days and times of their roster cycle
- Build a roster based on these times as a template for future rosters.
- Make changes to the rosters as required and re-publish them to the employee for their acceptance: “
- If changes need to be made on the day, follow the same process as 3 above.
- Once the times worked have been approved, they are published to the employee for sign-off.
The approved and accepted timesheets are ready for automated payroll interpretation in the Inzenius system.
The above process is built into the Inzenius out-of-the-box payroll system, and its application will ensure you have records of changes and employee acceptance at each stage of the process to satisfy the IR record-keeping regulations.
In the award, there is a provision for banking overtime in one period to cover many, which will aid in the flexibility of rostering and changes that need to be made due to customer service demand variations. This allows the business to cover overtime over more than one rostering or payroll period for the averaging provision.
Another area is the accrual and payment for leave that is inconsistent with the contracted hours. These hours may be outside of the employee contract hours and may need to be included in their Ordinary Times Earning, where the averaging of hours concept is being applied. This may require accruing leave balance amounts based on the timesheet hours worked rather than their contracted hours.
We can help automate these requirements directly from the timesheet data for automated award and leave interpretation.
We also facilitate the electronic record keeping of offers and acceptances by employees of changes from the contract of employment days and times of work for any future investigations.
As we assess the impact of the IR changes, we need a flexible system to facilitate the efficient processing of payroll.
The following is a direct extract from the hotel industry award conditions.
HIGA Award Conditions
5.1 Despite anything else in this award, an employer and an individual employee may agree to vary the application of the terms of this award relating to any of the following in order to meet the genuine needs of both the employee and the employer:
(a) arrangements for when work is performed; or
(b) overtime rates; or
(c) penalty rates; or
(d) allowances; or
(e) annual leave loading.
5.2 An agreement must be one that is genuinely made by the employer and the individual employee without coercion or duress.
5.3 An agreement may only be made after the individual employee has commenced employment with the employer.
5.4 An employer who wishes to initiate the making of an agreement must:
(a) give the employee a written proposal; and
(b) if the employer is aware that the employee has, or should reasonably be aware that the employee may have, limited understanding of written English, take reasonable steps (including providing a translation in an appropriate language) to ensure that the employee understands the proposal.
5.5 An agreement must result in the employee being better off overall at the time the agreement is made than if the agreement had not been made.
10.1 Classifications
An employer may employ part-time employees in any classification defined in Schedule A—Classification Structure and Definitions.
10.2 Definition of part-time employee
A part-time employee is an employee who:
(a) is engaged to work at least 8 and fewer than 38 ordinary hours per week (or, if the employer operates a roster, an average of at least 8 and fewer than 38 hours per week over the roster cycle); and
(b) has reasonably predictable hours of work.
10.3 A part-time employee is entitled, on a proportionate basis, to the same pay and conditions as those of full-time employees who do the same kind of work.
10.4 Setting guaranteed hours and availability
At the time of engaging a part-time employee, the employer must agree in writing with the employee on all of the following:
(a) the number of hours of work which is guaranteed to be provided and paid to the employee each week or, where the employer operates a roster, the number of hours of work which is guaranteed to be provided and paid to the employee over the roster cycle (the guaranteed hours); and
(b) the days of the week on which, and the hours on those days during which, the employee is available to work the guaranteed hours (the employee’s availability).
10.5 Any change to a part-time employee’s guaranteed hours may only be made with the written consent of the employee.
10.6 Rostering
The employer may roster a part-time employee to work their guaranteed hours and any additional hours in accordance with clause 15.2—Part-time employees and clause 15.5—Rosters (Full-time and part-time employees).
10.7 However, a part-time employee:
(a) must not be rostered to work any hours outside the employee’s availability; and
(b) must have 2 days off each week.
10.8 Increasing guaranteed hours to match regular work pattern
If a part-time employee has regularly worked a number of ordinary hours in excess of their guaranteed hours for at least 12 months, then they may request in writing that the employer agree to increase their guaranteed hours.
10.9 If the employer agrees to a request under clause 10.8, then the employer and the part-time employee must vary the agreement made under clause 10.4 to reflect the employee’s new guaranteed hours. The variation must be recorded in writing before it occurs.
10.10 The employer may only refuse a request under clause 10.8 on reasonable business grounds. The employer must notify the part-time employee in writing of a refusal and the grounds for it.
10.11 Change in employee’s circumstances that changes their availability
If there is a genuine and ongoing change in the part-time employee’s personal circumstances, then they may alter the times they are available by giving 14 days’ written notice of the alteration to the employer.
10.12 If the employer cannot reasonably accommodate the alteration to the part-time employee’s availability under clause 10.11, then (regardless of clause 10.5):
(a) the part-time employee’s guaranteed hours agreed under clause 10.4 cease to apply; and
(b) the employer and the part-time employee must agree a new set of guaranteed hours under clause 10.4.
10.13 Payment rates
(a) An employer must pay a part-time employee for ordinary hours worked in accordance with clause 18—Minimum rates.
(b) An employer must pay a part-time employee at the rates prescribed in clause 28.4—Overtime rate for all time worked in excess of:
(i) 38 hours per week or, if the employee works in accordance with a roster, an average of 38 hours per week over the roster cycle; or
(ii) the maximum daily hours limitations specified in clause 15.2—Part-time employees; or
(iii) the employee’s rostered hours.
15.1 Full-time employees
(a) The employer and a full-time employee must agree on the arrangement for working the average of 38 ordinary hours per week required for full-time employment.
(b) The average of 38 hours per week is to be worked in one of the following ways:
(i) a 19 day month, of 8 hours per day;
(ii) 4 days of 8 hours and one day of 6 hours;
(iii) 4 days of 9.5 hours per day;
(iv) 5 days of 7 hours and 36 minutes per day;
(v) 76 hours over a 2 week period with a minimum of 4 days off each 2 week period;
(vi) 152 hours each 4 week period with a minimum of 8 days off each 4 week period;
(vii) 160 hours each 4 week period with a minimum of 8 days off each 4 week period plus an accrued day off;
(viii) any combination of the ways set out in clauses 15.1(b)(i) to 15.1(b)(vii).
(c) The arrangement agreed must adopt one of the options mentioned in clause 15.1(b) and must satisfy the following conditions:
(i) the minimum number of ordinary hours that may be worked on any day is 6 (excluding meal breaks); and
(ii) the maximum number of ordinary hours that may be worked on any day is 11.5 (excluding meal breaks); and
(iii) an employee who is rostered to work more than 10 ordinary hours on more than 3 consecutive days is entitled to a break of at least 48 hours after the last consecutive day on which the employee works more than 10 ordinary hours; and
(iv) the maximum number of days on which an employee may work more than 10 ordinary hours in a 4 week cycle is 8; and
(v) the maximum spread of hours for an employee who works split shifts is 12; and
(d) In addition to the conditions set out in clause 15.1(c), an arrangement that adopts the option of working 152 hours per 4 week cycle with at least 8 days off as set out in clause 15.1(b)(vi) must satisfy the following conditions:
(i) the employer must not roster an employee to work on more than 10 consecutive days without a rostered day off; and
(ii) if an employer rosters an employee to work on more than 20 days in a 4 week period, the employer must pay the employee at the overtime rate for each day worked in excess of 20 in that period.
(e) In addition to the conditions set out under clause 15.1(c), where the agreed hours of work arrangement provides for 160 hours per 4 week period with an accrued day off, the arrangement will be subject to the following:
(i) No employee is to work more than 10 days in a row without a rostered day off.
(ii) Where practicable an accrued day off must be contiguous with an employee’s rostered days off.
(iii) Accrued days may be banked, up to a maximum of 5 days.
(iv) An employee may elect, with the consent of the employer, to take an accrued day off in part day amounts.
(v) If an accrued day off falls on a public holiday then, where practicable, the next day is to be taken as the accrued day off.
(vi) The entitlement to an accrued day off at the employee’s ordinary hourly rate is subject to the following:
(A) each day of paid leave, except annual leave and long service leave, and any public holiday occurring during the 4 week cycle must be regarded as a day worked for accrual purposes; and
(B) an employee who has not worked a complete 4 week cycle in order to accrue an accrued day off must be paid a pro rata amount for credits accrued for each day worked in the cycle. The pro rata amount is 24 minutes pay for each 8 hour day worked.
15.2 Part-time employees
A part-time employee’s rostered hours of work under clause 10.6 must meet the following conditions:
(a) the minimum number of ordinary hours that may be worked on any day is 3 (excluding meal breaks); and
(b) the maximum number of ordinary hours that may be worked on any day is 11.5 (excluding meal breaks); and
(c) an employee who is rostered to work more than 10 ordinary hours on more than 3 consecutive days is entitled to a break of at least 48 hours after the last consecutive day on which the employee works more than 10 ordinary hours; and
(d) the maximum number of days on which an employee may work more than 10 ordinary hours in a 4 week cycle is 8; and
(e) the maximum spread of hours for an employee who works split shifts is 12.
15.5 Rosters (Full-time and part-time employees)
(a) The following rostering provisions apply to full-time and part-time employees.
(b) The employer must prepare a roster showing for each employee their name and the times at which they start and finish work.
(c) The employer must post the roster in a conspicuous place that is easily accessible by the employees.
(d) The roster of an employee may be changed at any time by the employer and employee by mutual agreement or by the employer giving the employee 7 days’ notice of the change.
(e) An employee must have a minimum break of 10 hours between when the employee finishes ordinary hours on one day and starts ordinary hours on the next and a minimum break of 8 hours for a changeover of rosters.
15.6 Alteration of rosters and notice of days off
(a) The roster may be altered by mutual consent at any time or by amendment of the roster on 7 days’ notice.
(b) Where practicable 2 weeks’ notice of rostered day or days off or of accrued day or days off should be given, provided that the days off may be changed by mutual consent or through sickness or other cause over which the employer has no control.
[24—Annualised salary arrangements renamed and substituted by PR740701 ppc 01Sep22]
24.1 Clause 24 applies to all employees other than those within the Managerial Staff (Hotels) classification level as defined by Schedule A—Classification Structure and Definitions.
24.2 Annualised wage instead of award provisions
(a) An employer and a full-time employee may enter into a written agreement for the employee to be paid an annualised wage of an amount that is at least 25% more than the minimum wage prescribed in clause 18 multiplied by 52 for the work being performed in satisfaction, subject to clause 24.2(a)(vi), of any or all of the following provisions of the award:
(i) clause 18—Minimum rates;
(ii) clause 26—Allowances;
(iii) clause 28—Overtime;
(iv) clause 29—Penalty rates
(v) clause 30.3—Payment for annual leave loading; and
(vi) clause 35.3(a)—Additional public holiday arrangements for full-time employees
(b) The employee must not be required by the employer in any roster cycle to work in excess of:
(i) an average of 18 ordinary hours which would attract a penalty rate under clause 29.2(a) of this award per week, excluding hours worked between 7.00pm to midnight; or
(ii) an average of 12 overtime hours per week in excess of ordinary hours
without being entitled to an amount in excess of the annualised wage in accordance with clause 24.2(c).
(c) If in a roster cycle an employee works any hours in excess of either of the outer limit amounts specified in clause 24.2(b), such hours will not be covered by the annualised wage and must separately be paid for in accordance with the applicable provisions of this award.
(d) Where a written agreement for an annualised wage arrangement is entered into, the agreement must specify:
(i) the annualised wage that is payable;
(ii) which of the provisions of this award will be satisfied by payment of the annualised wage;
(iii) the outer limit number of ordinary hours which would attract the payment of a penalty rate under the award and the outer limit number of overtime hours which the employee may be required to work in a roster cycle under clause 24.2(a)(vi) without being entitled to an amount in excess of the annualised wage in accordance with clause 24.2(c).
(e) The employer must give the employee a copy of the agreement and keep the agreement as a time and wages record.
(f) The agreement may be terminated:
(i) by the employer or the employee giving 12 months’ notice of termination, in writing, to the other party and the agreement ceasing to operate at the end of the notice period; or
(ii) at any time, by written agreement between the employer and the individual employee.
24.3 Annualised wage not to disadvantage employees
(a) The annualised wage must be no less than the amount the employee would have received under this award for the work performed over the year for which the wage is paid (or if the employment ceases or the agreement terminates earlier over such lesser period as has been worked).
(b) The employer must each 12 months from the commencement of the annualised wage arrangement or, within any 12 month period upon the termination of employment of the employee or termination of the agreement, calculate the amount of remuneration that would have been payable to the employee under the provisions of this award over the relevant period and compare it to the amount of the annualised wage actually paid to the employee. Where the latter amount is less than the former amount, the employer shall pay the employee the amount of the shortfall within 14 days.
(c) The employer must keep a record of the starting and finishing times of work, and any unpaid breaks taken, of each employee subject to an annualised wage arrangement agreement for the purpose of undertaking the comparison required by clause 24.3(b). This record must be signed by the employee, or acknowledged as correct in writing (including by electronic means) by the employee, each pay period or roster cycle.
24.4 Base rate of pay for employees on annualised wage arrangements
For the purposes of the NES, the base rate of pay of an employee receiving an annualised wage under this clause comprises the portion of the annualised wage equivalent to the relevant rate of pay in clause 18—Minimum rates and excludes any incentive-based payments, bonuses, loadings, monetary allowances, overtime and penalties.
26.14 Split shift allowance
(a) Clause 26.14 applies to any full-time or part-time employee who works split shifts on any day.
(b) The employer must pay the employee an allowance of:
[26.14(b)(i) varied by PR718826, PR729263, PR740684, PR762117 ppc 01Jul23]
(i) $3.28 per day where the period between shifts is between 2 and 3 hours; and
[26.14(b)(ii) varied by PR718826, PR729263, PR740684, PR762117 ppc 01Jul23]
(ii) $4.98 per day where the period between shifts is more than 3 hours.
26.15 Overnight stay allowance
(a) Clause 26.15 applies to an employee who is requested to stay overnight on the employer’s premises in order to provide prompt assistance to guests outside ordinary business hours.
(b) An employer must pay the employee:
[26.15(b)(i) varied by PR718826, PR729263, PR740684, PR762117 ppc 01Jul23]
(i) an allowance of $59.70 per overnight stay; and
(ii) at 150% of the ordinary hourly rate of the employee under Table 3—Minimum rates for work performed of more than one hour in duration during an overnight stay.
(c) Hours worked by the employee during an overnight stay do not count for the purposes of hours of work, overtime or leave accruals.
NOTE: The allowance specified in clause 26.15(b)(i) is intended to compensate for the overnight stay and for work undertaken of up to one hour’s duration.
Part 5—Overtime and Penalty Rates
[Varied by PR763203]
28.1 Reasonable overtime
(a) Subject to section 62 of the Act and clause 28.1, an employer may require an employee to work reasonable overtime hours at overtime rates.
(b) An employee may refuse to work overtime hours if they are unreasonable.
(c) In determining whether overtime hours are reasonable or unreasonable for the purpose of clause 28.1 the following must be taken into account:
(i) any risk to employee health and safety from working the additional hours;
(ii) the employee’s personal circumstances, including family responsibilities;
(iii) the needs of the workplace or enterprise in which the employee is employed;
(iv) whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, working additional hours;
(v) any notice given by the employer of any request or requirement to work the additional hours;
(vi) any notice given by the employee of his or her intention to refuse to work the additional hours;
(vii) the usual patterns of work in the industry, or the part of an industry, in which the employee works;
(viii) the nature of the employee’s role, and the employee’s level of responsibility;
(ix) whether the additional hours are in accordance with averaging terms in clause 15—Ordinary hours of work and rostering arrangements inserted pursuant to section 63 of the Act, that applies to the employee; and
(x) any other relevant matter.
28.2 Payment of overtime
(a) An employer must pay a full-time employee at the overtime rate for any time worked in excess of their ordinary hours.
(b) An employer must pay a part-time employee at overtime rates in the circumstances specified in clause 10.13—Payment rates.
(c) An employer must pay a casual employee at overtime rates in the circumstances specified in clause 11.4 (Casual employment).
(d) An employer must pay a full-time or part-time employee at the overtime rate for any time that the employee is required to work on a rostered day off or an accrued day off.
(e) When a full-time or part-time employee works overtime on a rostered day off or an accrued day off the employee must be paid for a minimum of 4 hours even if they work for less than 4 hours.
(f) However, the 4 hour minimum payment does not apply if the work is part of a normal roster that began on the day before the rostered day off or accrued day off or is overtime that is continuous from the previous day’s duty.
28.3 In calculating overtime payments, overtime worked on any day stands alone from overtime worked on any other day.
28.4 Overtime rate
The overtime rate mentioned in clause 28.2 is the relevant percentage specified in column 2 of Table 13—Overtime rates (depending on when the overtime was worked as specified in column 1) of the employee’s ordinary hourly rate.
Table 13—Overtime rates
|
Column 1 For overtime worked on |
Column 2 Overtime rate (% of ordinary hourly rate) |
|
Monday to Friday—first 2 hours |
150% |
|
Monday to Friday—after 2 hours |
200% |
|
Midnight Friday to midnight Sunday |
200% |
|
Rostered day off |
200% |
NOTE 1: See clause 29.1 for work performed on a public holiday.
NOTE 2: Schedule B—Summary of Hourly Rates of Pay sets out the hourly overtime rate for all employee classifications, including junior employees and apprentices, according to when overtime is worked.
28.5 Time off instead of payment for overtime
(a) An employee and employer may agree in writing to the employee taking time off instead of being paid for a particular amount of overtime that has been worked by the employee.
(b) Any amount of overtime that has been worked by an employee in a particular pay period and that is to be taken as time off instead of the employee being paid for it must be the subject of a separate agreement under clause 28.5.
(c) An agreement must state each of the following:
(i) the number of overtime hours to which it applies and when those hours were worked; and
(ii) that the employer and employee agree that the employee may take time off instead of being paid for the overtime; and
(iii) that, if the employee requests at any time, the employer must pay the employee, for overtime covered by the agreement but not taken as time off, at the overtime rate applicable to the overtime when worked; and
(iv) that any payment mentioned in clause 28.5(c)(iii) must be made in the next pay period following the request.
[Varied by PR718826, PR729263, PR740684, PR762117]
29.1 Clause 29 sets out penalty rates for hours worked at specified times or on specified days that are not required to be paid at the overtime rate mentioned in clause 28.4—Overtime rate.
[29.2 varied by PR718826, PR729263, PR740684, PR762117 ppc 01Jul23]
29.2 An employer must pay an employee as follows for hours worked by the employee during a period, or on a day, specified in column 1 of Table 14—Penalty rates:
(a) for a full-time or part-time employee, at the percentage specified in column 2 of that Table of the ordinary hourly rate of the employee under Table 3—Minimum rates plus the additional amount specified in that column for hours worked between 7.00 pm and 7.00 am on a Monday to Friday; or
(b) for a casual employee, at the percentage specified in column 3 of that Table of the ordinary hourly rate of the employee under Table 3—Minimum rates plus the additional amount specified in that column for hours worked between 7.00 pm and 7.00 am on a Monday to Friday.
.
29.3 Penalty rates not cumulative
(a) Clause 29.3 applies where more than one penalty rate would be payable for hours worked at a particular time.
(b) Subject to clause 29.3(c), where more than one penalty rate would be payable for hours worked at a particular time, the employer must pay the employee the highest applicable penalty rate, but no other applicable penalty rate is payable.
(c) Where applicable, the penalty payable under clause 16—Breaks is payable in addition to the penalty rate payable in accordance with clause 29.3(b).
29.4 Additional provisions for work on public holidays
(a) A full-time or part-time employee who works on a public holiday will be paid for a minimum of 4 hours’ work even if the employee works for a shorter time.
(b) A casual employee who works on a public holiday will be paid for a minimum of 2 hours’ work even if the employee works for a shorter time.
(c) Hours of work performed on the day immediately before a public holiday, or immediately after a public holiday, that form part of one continuous shift, are counted as part the minimum hours worked for the purposes of this clause.
(d) An employer and a full-time or part-time employee may agree that, instead of the employee being paid at 225% of the ordinary hourly rate of the employee under Table 3—Minimum rates for hours worked on a public holiday, the following arrangements are to apply:
(i) the employee is to be paid at 125% of the ordinary hourly rate of the employee under Table 3—Minimum rates for hours worked on the public holiday; and
(ii) an amount of paid time equivalent to the hours worked on the public holiday is to be added to the employee’s annual leave or the employee is to be allowed to take a day off during the week in which the public holiday falls or within a period of 28 days after the public holiday.
NOTE: Disputes about requests for extensions to unpaid parental leave may be dealt with under clause 40—Dispute resolution and/or under section 76B of the Act.
35.3 Additional public holiday arrangements for full-time employees
[35.3 subsituted by PR747333 ppc 14Nov22]
(a) An employer must, if the rostered day off or accrued day off of a full-time employee falls on a public holiday, do one of the following:
(i) pay the employee an extra day’s pay; or
(ii) give the employee an alternative day off within 28 days; or
(iii) give the employee an additional day’s annual leave.
(b) If a public holiday is a part-day public holiday, then clause 35.3(a) applies on a pro-rata basis for the number of ordinary hours on the part-day public holiday.
35.4 Public holiday arrangements for part-time employees
(a) Clause 35.4 applies if under an agreement under clause 10.5, as varied under clause 10.6, a part-time employee is to work on a day that is a public holiday.
(b) The part-time employee is entitled to be absent from their employment on that day.
(c) If the part-time employee is absent in accordance with clause 35.4(b), the employer must pay the employee for the ordinary hours that the employee was to work that day.
(d) A part-time employee who works on that day must be paid in accordance with clause 35.
Part 7—Industry Specific Provisions
36.1 Right to make deductions
Subject to clauses 36.2 and 36.3, an employer must not deduct any sum from the wages due to an employee under this award in respect of breakages or cashiering underings except in the case of wilful misconduct.
36.2 Deductions to be reasonable and proportionate
Any deduction made under clause 36 must be reasonable in the circumstances and proportionate to the loss suffered by the employer.
36.3 Deductions for employees under 18 years of age
Deductions must not be made under clause 36 from the wages of an employee who is under 18 years of age unless the deductions have been agreed to in writing by the employee’s parent or guardian.
[Varied by PR718826, PR718981, PR729263, PR729448, PR740684, PR740855, PR762117, PR762280]
NOTE: Schedule C—Summary of Monetary Allowances contains a summary of the deductions in Table 15—Employees on adult rates and Table 16—Employees on junior rates.
37.1 Right to make deductions
Subject to clauses 37.2 and 37.3, an employer may deduct an amount from the wages of an employee for the provision of either meals or accommodation or both.
.
37.4 Deductions for meals
An employer may only deduct an amount from an employee’s wages for providing the employee with a meal if:
(a) the employee does not live in accommodation provided by the employer; and
(b) the meal is provided during the employee’s normal working hours; and
(c) the employee has been informed of the amount that will be deducted from the employee’s wages for the meal and has consented to the meal being provided.
37.7 Amount of deduction for meals only
[37.7 varied by PR718981, PR729448, PR740855, PR762280 ppc 01Jul23]
An employer may deduct an amount of $9.26 per meal from an employee’s wages for providing the employee with a meal.