Trying to find the pay that covers your employees?

• Modern awards
• Pay rates under modern awards
• Pre-modern award arrangements

Modern awards

From 1 January 2010, modern awards apply for most industries and workplaces. However, in many modern awards, there is no change in pay rates on 1 January 2010.

A number of modern awards allow pre-modern award rates (eg. from a pay scale or state reference transitional award) to continue until the first pay period on or after 1 July 2010.

In those cases, if your employee’s rate of pay changes under the modern award, the difference between the modern award rate and the pre-modern award rate will be phased in over 5 annual instalments, from 1 July 2010.

Your employee’s rate of pay will depend on what industrial instrument covers them and whether they are employed in the national system. Find the pay rate for the relevant instrument below.

To find out what you and your employees are covered by, call the Fair Work Infoline on 13 13 94 or chat online with our  Live help advisor.

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Pay rates under modern awards

While modern awards start from 1 January 2010, pay rates in most modern awards commence from the first pay period on or after 1 July 2010.

A number of modern awards contain a model phasing schedule which allows the following wages and conditions to be phased in over 5 annual instalments:

• minimum wages, including juniors, trainees, employees with disability and piecework rates
• casual and part time loadings
• Saturday, Sunday and public holiday penalty rates
• evening and other penalty rates
• shift allowances.

This period gives employers and employees who are affected by modern awards enough time to introduce the changes.

Modern awards and transitional provisions are not intended to reduce an employee’s take-home pay. If an employee does suffer a reduction in take-home pay, they can apply to Fair Work Australia to make an order to make sure their pay is not reduced.

If the modern award contains lower wages and/or penalty rates, you should be careful that your employee’s overall take-home pay is not reduced.

What’s my employee’s rate of pay before 1 January 2010?

Modern awards pay rates commence from the first full pay on or after 1 January 2010. Before this, your employee’s previous pay and penalty arrangements continue to apply.

See pre-modern award arrangements below for more detail.

What’s my employee’s rate of pay from 1 January 2010?

Some modern award pay rates start from 1 January 2010. A number of modern awards allow pre-modern award rates (i.e. from a pay scale, the Federal Minimum Wage, or certain transitional awards) to continue until the first pay period on or after 1 July 2010.

See pre-modern award arrangements below for more detail.

What’s my employee’s pay after 1 July 2010?

Modern award pay rates may result in an increase or decrease in wages.

Most modern awards will have a section with instructions on phasing in the necessary changes to minimum wages over 5 annual instalments beginning from the first pay period on or after 1 July 2010.

In those cases, pay-rate changes will be introduced in 20 per cent instalments each year from 1 July 2010 to 1 July 2014.

Employers will also need to take into consideration the minimum wage decisions that Fair Work Australia will apply from 1 July each year.

Consult your relevant modern award for any specific transitional arrangements. See also the pre-modern award arrangements below.

Phasing in new pay rates

If your modern award contains higher wages there is nothing to stop you from immediately paying the higher modern award rates for all your employees. Of course, you will have to make sure you are always paying the minimum wage or penalty rate which your employee is entitled to.

Where the model phasing schedule is included in a modern award:

• the pre existing rates continue to apply until the first full pay period on or after 1 July 2010
• the increases and reductions in wages under the model phasing schedule commence from the first full pay period on or after 1 July 2010
• the transitional arrangements will be based on the difference between your employee’s modern award pay rate and their pre-modern award instrument pay rate.

Some modern awards do not contain a model phasing schedule or specific transitional provisions regarding wages. Where neither of these are present in a modern award, the full terms of the modern award apply from 1 January 2010.

National minimum wage

If no modern award covers your employee, they will generally be covered in relation to minimum pay, by the national minimum wage (minimum wage). The national minimum wage will be set by Fair Work Australia, with the first determination due before 1 July 2010.

Prior to this, minimum wage rates will continue at the same rate as the current Federal Minimum Wage (FMW), which is $543.78 per week or $14.31 per hour (before tax).

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Pre-modern award arrangements

The minimum amount of pay an employee must get can be different for each job. It can also be different depending on where the rate of pay comes from.

If your employee is covered by the national system, their pay rate before 1 January 2010 can come from:

• a pay scale
• the Federal Minimum Wage (currently $14.31 per hour - before tax) or a special Federal Minimum Wage for employees with disability
• a workplace agreement (ie. an Australian Workplace Agreement (AWA), individual transitional employment agreement (ITEA) or collective agreement made after 27 March 2006)
• an enterprise agreement
• a transitional award
• an agreement made before 27 March 2006.

Need help and advice on pay? Call the Fair Work Infoline on 13 13 94 or chat online with our  Live help advisor.

Pay scale

If there's an award that applies in your industry or workplace, it should have a related pay scale. If your industry or workplace was covered by a state award before 27 March 2006, it will have a related pay scale. Your employee’s pre-modern award rate of pay will be contained in this pay scale.

If your employees are moving to a modern award, transitional arrangements may apply if the pre-existing rate of pay from the pay scale is different from the rate of pay under the modern award.

Federal Minimum Wage

If no pay scale covers the type of job your employee does, they will generally be covered by the Federal Minimum Wage (minimum wage). The current FMW is $543.78 per week or $14.31 per hour (before tax).

There's also a special Federal Minimum Wage for employees with disability.

In future the national minimum wage will replace the Federal Minimum Wage. The national minimum wage will be set by Fair Work Australia, with the first determination due before 1 July 2010.

Prior to this, minimum wage rates will continue at the same rate as the current Federal Minimum Wage (FMW), which is $543.78 per week or $14.31 per hour (before tax).

Workplace or enterprise agreement

If your employees are covered by a workplace or enterprise agreement, the rate of pay should be written into the agreement.

If there's no rate of pay in the agreement, or if the rate of pay provided is lower than the related pay scale, your employees should get at least the minimum rate contained in their pay scale or the minimum wage (whichever applies).

Important!  From 1 January 2010 the base rate of pay in an agreement cannot be less than the relevant modern award rate or if there is no applicable modern award, the national minimum wage.

If they are moving from an agreement to a modern award, the modern award may contain transitional arrangements which will apply if the pre-modern award rate of pay from the instrument that would have covered them if they weren’t covered by an agreement is different from the rate of pay under the relevant modern award.

Transitional awards

Transitional awards essentially apply to employers who:

• aren't constitutional corporations
• operate in a state, rather than a territory
• were covered by a federal award before 27 March 2006.

You could have been bound by federal awards before 27 March 2006 in a variety of ways, such as being named in the award or being a member of an employer association named in the award.

A transitional award must be read together with any Australian Industrial Relations Commission decisions that might vary rates of pay or other entitlements.

Note: Transitional awards will only apply until 27 March 2011.

In those states that have referred their industrial relations powers to the Commonwealth, modern awards will replace transitional awards. In these cases, transitional arrangements regarding the base rate of pay may apply if the pre-modern award rate of pay from the transitional award is different from the rate of pay under the modern award.

An agreement made before 27 March 2006

If your employees are covered by an agreement (such as an Australian Workplace Agreement (AWA), a certified agreement or a state employment agreement (that become preserved in the Federal system) made before 27 March 2006, the rate of pay should be written into the agreement. If not, your employees should get at least the minimum rate contained in the pay scale or the minimum wage (whichever applies).

Important!  From 1 January 2010 the base rate of pay in an agreement cannot be less than the relevant modern award rate or if there is no applicable modern award, the national minimum wage.

Transitional arrangements may apply if the pre-modern award rate of pay from the relevant pay scale or federal minimum wage is different from the rate of pay under the modern award.

If you’re having difficulty finding out what you and your employees are covered by, call the Fair Work Infoline on 13 13 94 or chat online with our  Live help advisor.
 

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