Page 27 - Ragtrader Magazine April 2020

WWW.RAGTRADER.COM.AU LAW APRIL 2020 27 PAYROLL
Pay day
CHANGES TO THE annualised salary clause have officially taken effect, im- pacting 22 modern awards.
By raising the bar for workplace practices, these changes have a direct impact on the way employers handle staff working hours and pay under an annualised salary arrangement.
This is especially important following the series of underpayment claims that flipped many large retailers upside down last year. A reworked, tighter system aimed to improve pay practices coincides with an unprecedented period of public, large scale non-compliance.
While new clauses motivate employers to stay compliant, they also come with new challenges and potential cost. The peripheral effects of these changes will impact many parts of an organisation, including finance, workplace policies and even employee wellbeing.
And with the wage theft bill on the hori- zon, which could potentially send those failing to comply behind bars, employers are under great pressure to get pay right. By breaking down the new annualised sal- ary provisions, we will unveil the crux of the matter and share insights on how to stay compliant to legislation while main- taining a healthy workplace culture.
So what’s the upside? Improving pay transparency is key here.
The new provisions enforce two major pay transformations. The first is setting higher standards for overtime and record- keeping measures for certain award cov- ered employees.
Employers operating annualised salary arrangements in the relevant occupations will now need to keep records of start, break and finish times and ensure employ- ees acknowledge these records in written or electronic format.
Secondly, at the end of every pay period employers must conduct a payroll recon- ciliation against defined ‘outer limits’ for overtime and penalty hours, and then again every 12 months and reconcile the
employees salary against what they would otherwise have been entitled to under the relevant award.
These changes are aimed at improv- ing the compliance practices of busi- nesses that are more prone to underpay staff. With payroll becoming more vis- ible across the organisation, there will no doubt be improvements in pay accuracy and transparency.
The end result is payroll is becoming very much a front-line organisational function, and one that carries additional burdens of reputational and financial risk for prevent- able errors. As payroll becomes a regular point of discussion at executive level, there’s never been a stronger case to give payroll a seat at the boardroom table.
Are there any downsides? Work flexibil- ity and culture are potentially at risk.
The rigidity of these clauses means once an employee clocks in their hours, they automatically start to lose some
of the freedom that both they
and the employer may have uti-
lised within a flexible system.
For example, within a flexible
system, a carer under the Clerks
Award may request to leave work
at 3pm to pick up their child and
put them to bed before clocking
back into work at 8pm. However
prima facie under the new pro-
visions, 8pm is outside of the “ordinary hours”, and the work the employee performs will now be considered overtime. Employers may legally reject the carer’s request under the ‘reasonable business ground’ of addi- tional cost.
Workplace flexibility has risen to become the top factor behind Gen Z’s selection of jobs. Unfortunately, employers affected by these new clauses now face the choice of increased cost or compromising their ability to attract new talent into their organisation.
So employers, what’s next?
While these clauses may change employ- ers’ ability to innovate employee payroll
options, it isn’t all doom and gloom. By striking a balance between clauses and workplace freedom, employers can ensure the business is kept in good hands and employees are left satisfied.
They must first adapt and embrace the new requirements immediately. The bottom line is to abide by every mandatory action addressed in the clause, from record-keep- ing, electronic acknowledgement to calculat- ing outer limits of ‘assumed’ ordinary hours and enforcing payroll reconciliation. This way, they show genuine care for employees’ pay and the business’s reputation.
However, workplace flexibility remains just as important. While adapting to new clauses, employers should reinforce communication with staff and the pay- roll department to ensure transparency cascades through the organisation and employee expectations are heard and, when possible, met.
After a spate of payment scandals in the retail industry, Richard Breden looks at new changes.
With the wage theft bill
on the horizon, it could potentially send those failing to comply behind bars.
Payroll can be extremely complex, which is why staying up to date and knowledge- able on every new pay provision is extremely important. Employers are recommended to seek payroll experts for professional advice. In a time where payroll is quickly gaining publicity, transitioning from a backroom officer to a member at the boardroom table, employers need to equip themselves with the knowledge to fully understand how to cooperate with this new major stakeholder, to keep the business in good hands. ■
This article is written by Richard Breden, general manager of Ascender HCM.