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Get ready: Changes to Australian modern awards coming in March

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Mel Arrold

Feb 19, 2020

If you’re an Australian employer, you may be aware that changes are coming to modern awards that will require added compliance. The Fair Work Commission announced its final decision last year amid media stories of employers underpaying workers. The new award requirements take effect 1 March 2020.

Many businesses will need to review employment contracts and update their HR and payroll practices in the coming weeks. If you’re an employer who uses Xero Payroll, you’ll want to ensure you’re compliant. These are just a few of the tasks that will apply to an enlarged group of 22 modern awards:

  • Annual calculations of what the employee would have been paid under the award compared with the annualised wage actually paid (with reconciliations and back pay of any shortfalls)
  • Recording start and finish times, as well as any unpaid breaks taken by each employee subject to an annualised wage arrangement (in order to perform the calculations and reconciliations as listed above)
  • Records must be signed by employees or acknowledged as correct in writing (including electronic methods) with each pay period/roster cycle. 

Some employers will also need to advise employees of the formula that was used to determine their annual salary and any excess hours of work not covered by their annual salary.

Tools to help

Third-party apps: Many Xero subscribers already use third-party apps that integrate with Xero Payroll. These apps can handle rostering and timesheets. You’ll want to investigate which ones might be a good fit for your situation come 1 March.

Fair Work resources: There’s an app and timesheet template available from Fair Work. While the Fair Work app is a standalone resource, you can export information and enter it manually into Xero. And the timesheet template may be useful for those disinclined to record details via electronic methods.

Expert advisors: If you have questions about how to interpret the awards and stay compliant, consult an expert. We have a list of knowledgeable bookkeepers in our Xero Advisor Directory. You can sort them by postal code and industry to find a professional who can steer you through the rules as they apply to you. 


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