Posted: 3rd September 2017
Posted in: Bones Blog, General HR
As a HR Consultant, I often see businesses paying employees annualised salaries instead of the wage amounts and allowances stipulated under a Modern Award. There’s several reasons to the preference for an annualised salary option:
As with any contractual arrangement, an annualised salary agreement should be documented. Having a well worded set off clause that clearly identifies which entitlements are rolled up under the salary agreement provides the first step in protecting yourself as an employer. Additional steps to manage risk include:
17. Annualised salaries
(b) Where an annual salary is paid the employer must advise the employee in writing of the annual salary that is payable and which of the provisions of this award will be satisfied by payment of the annual salary.
Even if you’re confident your annualised salary payment is in excess of the amount your employees would earn under the relevant Modern Award, having employment documents that clearly spell out what amounts are being paid to satisfy entitlements under the Award is a smart move. Avoiding ambiguity and confusion by having concise document content reduces the risk of future underpayment claims and offers you the benefits of annualised salary arrangement without headaches down the track.
Check out an example of Annual Salary Agreement template at:
https://www.fairwork.gov.au/ArticleDocuments/766/Annual-salary-agreement-clerks-award.doc.aspx
Give Bare Bones Consulting a call to discuss our range of HR services to help your business succeed.
Even if you elect to not proceed after our first complimentary consultation you’ll be in a better position to know what’s possible.
We believe our approach to HR is unique... but then again, so is your business.