Annualised Salary Requirements: Are You Compliant?

by | Oct 12, 2021

It’s been 18 months since Fair Work Australia announced its new annualised salary requirements for a range of Modern Awards. Businesses can’t simply pay an employee a salary and expect this to compensate for other potentially applicable allowances anymore. Now they have to confirm that an employee is better off under this arrangement and compensate them if they’re not.

The need to validate payments versus entitlements has become a contentious topic for many businesses. Of course, a series of unexpected challenges hasn’t helped things (COVID-19 anyone?).

Are You Compliant?

So, here’s the question: are you 100% confident you have all the data at your fingertips to not just be compliant, but show that you are?

Did you answer yes? Congratulations, you can stop reading now!

No? Read on.

Annualised Salary Requirements and WFM

If you have a robust workforce management solution, you already have everything you need to get started. However, I’d be willing to bet you implemented your solution before these new requirements were applicable to your business or didn’t fully consider the impact of the changes during implementation. Were you expecting to have to report on this new data for your salaried employees? Your organisation may need to customise or configure a few things differently to reach compliance.

You need to be able to provide the data when required and potentially at short notice. Obviously, it’s important you know how much data manipulation you will have to do to meet the reporting requirements. Understanding that will help you estimate how much the exercise will cost.

It could be time for a system health check.

Your Annualised Salary Requirements Health Check

Not sure if your WFM solution is optimised to help you meet the new annualised salary requirements? Here are some simple questions:

  • Are you capturing your full-time salaried employees’ actual worked times, including their unpaid break times?
  • Is your WFM solution set up to capture and calculate the payroll categories you need for your calculations? Remember, this could include capturing weekend hours worked, allowances that would have been applicable, leave loading etc., even though these aren’t payable for salary employees.
  • Can you report on this data and complete a ‘true-up’ on demand for any employee? And can you reconcile their actual compensation vs calculated entitlements based on actual hours worked?
  • Do you have a specific report designed to provide this information easily and quickly without data manipulation?
  • Is this information provided in an easily consumable format for end users, including HR, payroll and employees?

If you answered no to any of these questions, it might be time to update your WFM solution. You may also want to look at your internal HR processes and align them with your WFM solution capabilities.

The Importance of Change Management

But the new annualised salary requirements don’t just affect your WFM and HR practices. Indeed, salaried staff often find the transition to recording time difficult. So, you’ll need to carefully consider and plan your change management activities and messaging. However, once your team begin to see the benefits, such as recognition of actual hours worked, this will help the adoption of the new requirements.

What Next?

Need to review your systems and processes to ensure you’re compliant? Contact Axsium to get a free half-hour consultation and find out how we can help you get there.

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