On 20 January 2023, the Fair Work Commission handed down a decision that will entitle professional employees covered by the Professional Employees Award 2020 to receive penalty rates for additional and unsociable hours of work. This includes professionals in engineering, science, information technology, and quality auditing.
The intention of this decision is to address the low pay of certain professional full-time employees who are required to work significant additional hours without compensation, whilst balancing it against the flexibility that salaried employment offers to employers in covering ‘reasonable additional hours’.
The primary changes that will be introduced include:
- A 125% penalty rate for all hours worked (whether ordinary or overtime hours) before 6:00 am or after 10:00 pm on Mondays to Saturdays;
- A 150% penalty rate for all rostered hours worked (whether ordinary or overtime hours) on Sundays and public holidays; and
- Payment in accordance with the hourly rate in clause 14 of the Award for all hours worked in excess of 38 hours for the week, or time off in lieu.
For casual employees, the above penalty rates will be in addition to their casual loading.
Employers will also have to ensure they keep full and proper records of all hours worked by their full-time employees in excess of 38 hours, and any work performed in the above timeframes where the new penalty rates are applicable.
Where employees have an annual salary that is 25% or more in excess of the minimum annual wage for their classification, they will not be entitled to the penalty rates or the additional payments above. Professionals engaged in wholly or principally managerial positions are also excluded from these penalty rates and additional payments.
It is anticipated that these changes will come into effect in March 2023.
Ahead of these changes, employers should:
- Ensure they are fully aware of the incoming changes and how they may affect their employees’ pay entitlements;
- Conduct a review of current employee contracts for employees covered by the Professionals Employees Award 2020 and their salary levels as well as the overtime practices within the business;
- Develop good record-keeping systems for overtime hours, if necessary.
If you require any advice in relation to the interpretation of the modern awards or any clarification as to the above upcoming changes, please contact our Workplace Team for assistance.
This article was written by Danny Clifford, Director. For further information please contact Danny Clifford, Director.
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