Minimum wages in modern awards will increase by 3.4% from the first pay period commencing on or after 1 July 2011. That means that minimum wages paid under modern awards will change from the full pay period that falls completely in July. Employers are not required to split a pay period and use two different sets of rates to calculate wages for one pay period.
This does not necessarily mean that enforceable wage rates will go up though. When modern awards were created, there were thousands of pre-modern awards (federal awards, Notional Agreements Preserving State Awards) that were collapsed down into 123 modern awards. Some of those pre-modern awards had wage rates, penalties and loadings that far exceed the modern award entitlements - and those reductions will be phased in over five years.
Important note: The modern award that applies to the work being done will not necessarily specify the enforceable wage rates, penalties and loadings!
For example, under the pre-modern NAPSA for casual drivers in South Australia, the penalty rate for working on Good Friday was 368% of the ordinary time rate of pay, while under many modern awards, the penalty rate is 275%. The difference between the two penalties is 93%, and therefore each year, the penalty rate for a casual driver in South Australia will reduce by 18.6%. This year, that may mean that the hourly rate of pay for a casual driver working on Good Friday in South Australia is actually LESS than the hourly rate of pay for the same work last year, despite the fact that there's been an increase in rates of 3.4%.
Or there's another example, which probably won't show up so blatantly in hourly wage rates, but nonetheless has an effect on wage rates. Casual clerical employees in Victoria were effectively entitled to 33.6% casual loading prior to 1 January 2010, whereas after 1 January 2010, the casual loading was 25%. So for the 2010/11 year, the enforceable casual loading for a clerical employee in Victoria was 31.6%, and for 2011/12 it's 30%, even though the award says 25%.
The moral of the story ... don't just look at the relevant modern award when you're working out wage rates, make sure you identify the relevant pre-modern award and do the transitional calculations to check you've got the enforceable wage rate.
Comments
Post has no comments.