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What is base rate of pay?
According to Fair Work Act 2009, Section 16, the base rate of pay is the rate the employee gets paid working for ordinary hours. It does not include loadings, overtime or penalty rates, incentive-based payments and bonuses, monetary allowances and any other separately identifiable amounts. Under the national workplace relations system, base pay rates that generally depend on age, job classification and employment category usually come from an enterprise agreement or modern award. If the employee is not covered by an award the national minimum wage applies. Why is base rate of pay important? There are payments under the National Employment Standards (NES) that are paid at the base rate of pay: · Annual leave · Personal leave · Public holiday · Make-up pay relating to jury service · Redundancy pay It is also important to distinguish the base rate of pay from the full-rate of pay. It is defined in Section 18 of the Fair Work Act. It includes incentive-based payments and bonuses, loading, monetary allowances, overtime or penalty rates and any other separately identifiable amounts. When an employer terminates an employee, the full rate of pay is paid to the employee in lieu of the notice – which is the hours the employee would have worked had the employment continued until the end of the minimum period of notice. Source: www.fairwork.gov.au National Employment Standards
As of the 1st of January 2010, there are minimum conditions of employment on a federal level embodied in the National Employment Standards (NES). These standards are set out in the Fair Work Act 2009 that contains ten minimum standards of employment. They were a means of maintaining a safety net of fair working conditions. The standards address minimum wages, working hours, leave entitlements and termination. A contravention of a provision of NES may result to penalties of up to $10,200 for an individual and $51,000 for a corporation. These standards are listed here and explained in detail in succeeding chapters. Fair Work Act 2009 became effective on the 1st of July 2009 which replaced most of the Australian workplace systems. The ten national employment standards are: 1. Maximum weekly hours of work are 38 hours per week plus reasonable additional hours. 2. Ability to request for flexible working arrangements in certain circumstances 3. Parental leave and related entitlements 4. Paid annual leave of four weeks paid leave plus additional week for certain shift workers 5. Paid personal leave of ten days (covers sick and carer’s leave) except casual employees 6. Community service leave such as voluntary emergency service and jury service 7. Long service leave – this is generally governed by state and territory laws while the development of a national long service leave standard is pending 8. Public holidays that are paid day off on public holidays except where reasonably requested to work 9. Notice of termination and redundancy – up to five weeks’ notice of termination and 16 weeks’ severance pay on redundancy which is based on the employee’s length of service 10. Provision of Fair Work Information Statement must be provided by employers to all employees. The statement contains the National Employment Standards (NES), modern awards, agreement-making, the right to freedom of association, termination of employment, individual flexibility arrangements, among others. For more information please visit www.fairwork.gov.au Source: www.fairwork.gov.au Minimum wage and modern awards
Employees in the national system generally cannot be paid less than minimum wage and minimum wage will be outlined in your award or agreement. Modern Awards cover most Australian employers and employees and contain the minimum terms and conditions for employees in particular industries and occupations. The current full-time minimum wage is $16.37 per hour or $622.20 per week. Casuals covered by the national minimum wage get an extra 24% ($20.30 per hour) While modern awards contain minimum wages, some modern awards have transitional arrangements in place, whereby the wage-related components that came into effect 1 July 2010 may be phased in over five years with transitional provisions on: · base rates of pay, including piecework rates · casual and part-time loadings · Saturday, Sunday and public holiday penalty rates · evening and other penalty rates · shift allowances or penalties. It is important that employers check the relevant Award. These are generally found in Schedule A of the award. Search for your modern award using the Fair Work Ombudsman’s new Award Finder. What if an employer gets it wrong? Any breach in the terms contained in a Modern Award or a national minimum wage order may be investigated and enforced by the Fair Work Ombudsman (FWO). The investigation may result in expensive audits and penalties and the breach may be in terms of: · pay · conditions (annual leave or sick leave) · unlawful workplace discrimination · workplace rights Source: www.fairwork.gov.au |
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January 2016
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