The new provisions, set to affect 22 awards including white-collar professions under the Banking, Finance and Insurance Award, will see employers needing to make systematic changes to how they record employee hours.
Employers will need to keep a record of start, break and finish times for all employees in each pay period.
Employees will need to either sign the record or acknowledge it as correct in writing, which includes electronic means.
Additionally, the new provisions introduce “outer limits” to an employee’s annualised wage.
The first outer limit is the number of hours outside of normal work hours an employee can work each pay period before the employer needs to start paying penalty rates.
The second is how many overtime hours an employee can work each pay period before the employer needs to pay extra wages.
Where annualised wages traditionally accounted for overtime hours in deciding an employee’s minimum rate, the new provisions mean employers would have to pay extra on top of the annualised wage if the outer limits are breached.
Ascender general manager Richard Breden believes accountants will need to be abreast of the new changes.
“An accountant is a trusted adviser working with employers who often turn to an accountant to make sure they’re doing things in accordance with the relevant legislation,” Mr Breden said.
“If, as the trusted adviser, employers are asking accountants to explain these new laws, accountants have an obligation to get across these new laws and be able to articulate the consequences and how their clients can comply.”
Businesses that are non-compliant with the new laws are exposed to fines from the Fair Work Ombudsman, with maximum penalties of $63,000 per breach for businesses and $12,600 per breach for individuals.
The government is also looking to pass legislation to criminalise the worst cases of underpayment.
In order to better understand the new changes, Mr Breden said it was important to talk to an adviser.
“The government hasn’t been forthcoming with information or guidance, so it’s very difficult as an employer to better understand [the changes], so you need to be educated,” he said.
“Talk to your adviser — that’s tricky for accountants because they may well be the adviser — and talk to industry associations whose job it is to keep abreast of these changes.”
There has also been concern for how the new provisions might affect workplace flexibility.
Under the National Employment Standards, employers have to consider requests for flexibility for certain types of employees.
This includes employees who are parents, carers or work with some form of disability.
Flexible working arrangements can be refused by an employer under reasonable business grounds such as if the new working arrangements will prove too costly for the employer.
Mr Breden said the new regulations will likely harm workplace flexibility arrangements as an “unintended consequence”.
“If an employee has a carer arrangement and needs to go pick their child up from school at 3.00 and look after the child, then logs back into work online at 8.00 and does a couple more hours of work, under the new arrangement those hours will be overtime hours,” Mr Breden said.
“If an employee regularly works those hours, the employee goes over the outer limit for a pay period, then the employer may have to pay more in that pay period than they otherwise paid under the annualised salary.
“The concern is that such a request could be argued to be too costly for an employer and they would have legitimate grounds to refuse the flexible working arrangement. I think that’s a real step backwards culturally to not allow flexibility in the workplace.”
The following awards will be affected by the new provisions from 1 March:
- Banking, Finance and Insurance Award
- Broadcasting Award
- Clerks Award
- Contract Call Centres Award
- Horticulture Award
- Hydrocarbons Industry (Upstream) Award
- Legal Award
- Local Government Award
- Manufacturing Award
- Mining Award
- Oil Refining and Manufacturing Award (clerical employees)
- Oil Refining and Manufacturing Award (all other employees)
- Pastoral Award
- Pharmacy Award
- Rail Award
- Salt Award
- Telecommunications Award
- Water Award
- Wool Award.
The Commission has also decided to include the new annual salaries clauses in the following awards, but has not indicated when they will be updated with the new rules:
- Health Services Award
- Hospitality Award
- Marine Towage Award
- Restaurant Award.