“Employees who sign a contract aren’t covered by an award, are they?”
Context: It’s a common misconception that the Modern Awards do not apply to their staff because they are paid an agreed salary.
The Issue: The truth of the matter is that almost all employees are covered by Modern Awards, even if they weren’t prior to the Modern Awards coming into effect. The few exceptions to this rule include employees engaged wholly as Managers, covered by an Enterprise Agreement and/or employees paid in excess of $133,000 per annum.
In a recent ruling, the Franchise Owner of a Victorian La Porchetta Restaurant was fined $334,000 as a result of underpayment of 100 employees. This fine was a mixture of personal fines for the Franchise Owner, and fines for the business.
What should you do?: Don’t put yourself and your business at risk by underpaying your staff – any salary amount paid to an employee must take into account the employee’s entitlements under the relevant Modern Award, such as:
- Minimum Wage
- Penalty rates
- Overtime rates
- Allowances
- Annual Leave Loading
Don’t be fooled, these entitlements add up! If you’re not sure what Modern Award applies to your staff, let our team at HR On-Demand help by calling 1300 559585.
.