Award and Employee Entitlements

Are you paying employees correctly? Employee entitlements are generally determined by awards, legislation and contracts of employment, but may also be determined by an enterprise agreement in some workplaces.

With over 150 awards which are employer, industry and/or occupation based, it can be difficult for employers to firstly understand which award applies to their business and secondly keep up with all the changes. Applying the right Award is essential. Failure to apply the right Award and/or pay in accordance with its provisions has resulted in significant back payments and penalties for employers.

Determining Award coverage

A starting point is to determine whether your business is subject to the Modern Award system. Aitken Legal can do this for you.

Important considerations are:

  • whether there is an award that covers your industry;
  • whether there is an award that covers the employees’ occupation; or
  • whether there is no award coverage for the position.

Common mistakes we see with employee entitlements

  • Paying a ‘salary’ to an award covered employee and then assuming that award conditions are not applicable to that employee.
  • Paying an above award wage or salary, without a written agreement allowing for ‘off setting’ other award entitlements, and assuming that you can ‘set off’ those award entitlements.
  • Failing to realise that there is an award that applies to an employee’s employment and not complying with relevant award provisions, including minimum pay rates.
  • Failing to pay the applicable overtime and penalty rates.
  • Not understanding obligations in relation to part-time employees under awards – for example, setting days, time and hours of work and the risk of overtime rates applying when they work outside of these hours.
  • Not enforcing meal breaks in accordance with the relevant award.

Key risks of getting it wrong

‘Wage theft’ is a hot topic and major focus of the FWO. Employers need to proactively ensure they are paying employees correctly and complying with their award and legislative obligations or the consequences can be hefty – not just against the employer entity but against directors and managers personally too.

The Fair Work Ombudsman does not accept ignorance as an excuse. An underpayment or non-payment of an employee’s entitlements can lead to an investigation by the Fair Work Ombudsman and civil penalties of $13,320 per breach for an individual and $66,600 per breach for a corporation.

How can we help you? 

Aitken Legal assists Employers to determine what instruments govern their employees’ entitlements and we work with them to ensure compliance. Don’t make protecting your business a costly afterthought – speak to one of our experienced Employment Lawyers.

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