Are You Paying Your Employees Correctly?
Adhering to payroll obligations, correct payroll classifications and rates is very important for employers.
At the same time, it can get very confusing to determine the correct rate of pay to use and the correct minimum wage. We have compiled a few key points to consider when appointing a new team member or reviewing salaries:
- Full-time, Part-Time and Casual Employment
A full-time employee works, on average, around 38 hours each week. The hours are agreed upon between the employer and employee and are usually worked on the same days, at the same time each week. A full-time employee is entitled to accrue and take paid annual, sick/carer’s, long service and compassionate leave.
Part-time employment is very similar to full-time employment, whereby the employee works regular hours each week on the same days, at the same time. The hours worked each week are less than 38 hours per week, on average. They are also entitled to the same benefits and leave as a full-time employee, however, these will be calculated on a pro-rata basis.
Casual employment will be more irregular. The hours worked are often set based on the needs of the business and should be agreed upon by the employer and employee. A casual employee is not entitled to get paid annual, sick/carer’s or compassionate leave. They are entitled to paid long service leave based on actual hours worked. Casual employees should be paid 25% loading of a full-time/part-time employee rate.
- Am I covered by an award and which one?
The FairWork Ombudsman website lists all of the modern awards which are updated regularly. These awards outline the minimum pay rates and conditions of employment relevant for specific industries. Every award has a brief description on which industries or jobs it will cover, which is usually outlined in Clause Four. As an example, it may specify that a casual employee must be paid a minimum number of hours per shift, and when penalty rates apply.
- Employee Classifications and the Minimum Wage
Once you have determined the correct award that applies for your business, you need ensure your employees are paid the minimum award wage (or above). All awards will include classifications and a description of job titles or tasks that would be covered by each level. You need to ensure that your employees’ rate of pay is equal to, or above, the minimum wage based on that level. The minimum wage is reviewed every year and increases to the minimum wage usually occur on 1 July. Make sure you review these at least once a year and roll out any changes in line with the minimum wage increases.
For further information on employment types and pay rates, visit www.fairwork.gov.au.