Monday 27 May - Creating Confidence In How People Are Paid

Payroll Update: Travel time – Real Estate Award

The Fair Work Commission made changes to clarify when employees are entitled to be paid for excess travel time under the Real Estate Award. Excess travel time is extra time spent travelling from the employee’s home to the other location compared to their employer’s business premises. The rules mean:

• if an employer requires their employee to start or finish work at a location that’s away from the business or office premises, employees are paid for time spent travelling that is in excess of the time they normally spend travelling to their employer’s usual place of business.
• this additional time is treated as time worked and the employee is paid ordinary rates or overtime rates where applicable
• employees who are required to use their own vehicle are also paid the applicable motor vehicle allowance.

Example: Employee leaves their home to attend an inspection at a client’s home Alex is a real estate agent who holds home inspections every Saturday. They have an inspection on the other side of town and the employer requires Alex to travel to the client’s home which is 40 minutes away.

Alex’s commute to the real estate agency’s office typically takes 15 minutes. Alex is entitled to be paid for the excess travel time to the client’s house. This is paid for any travel time that’s in addition to the time it would usually take them to commute to the office.

The trip to the client’s home takes 40 minutes and Alex’s usual trip to the office takes 15 minutes, so Alex is entitled to be paid for the additional 25 minutes of travel time.

If Alex is required to use their own vehicle, they also receive the applicable motor vehicle allowance.

2024 Payroll Salary Guide

The 2024 Australian Payroll Salary Guide is now available for download.

Key Data Points:

Payroll Salaries have seen a sharp surge, up by 9.2% since 2023.

Finding the right payroll talent remains a top priority for Australian employers, ranking among their top 5 concerns.

The time to hire payroll professionals continues to extend, highlighting the growing demand for skilled individuals in this field.

To download your free copy of the salary guide - Click Here.

Free Webinar - EOFY in HR & Payroll

In this collaborative webinar with Employment Hero and the Australian Payroll Association (APA), we’ll be covering all aspects of your EOFY tasks, from key dates and upcoming changes, to reconciliations, reporting and workforce planning.

To register for this free webinar - Click Here.

Payroll: FAQ

Question:

• Can an employee take Personal leave during a period of Annual leave?

Answer:

• If an employee is sick or injured while on annual leave, the employee can use their paid personal leave instead of their annual leave. They can also use their paid Personal and carer’s leave instead of their annual leave for caring responsibilities or family emergencies. The amount of leave taken is deducted from the employee’s personal and carer’s leave balance. The employee should provide notice and evidence if their employer request for it.

Payroll Update: Changes to breaks between work periods in the Retail Award

The Fair Work Commission (the Commission) has made changes to the wording of the Retail Award concerning the pay rate for employees when they don’t get the minimum break between shifts.

An employee gets a higher pay rate if they work a shift without getting a 12 hour break between their shifts (or 10 hours by agreement). All hours worked without this necessary break are paid at 200% of their minimum hourly rate until they get the minimum break of 12 hours (or 10 by agreement).

All ordinary hours performed on public holidays is paid at the penalty rates prescribed in clause 22.1.

Casuals also get their casual loading, calculated on their minimum hourly rate.

These changes took effect from the first full pay period on or after 14 May 2024.

Example:

Employee starts work without having minimum break between shifts

Felix is a part-time employee working:

• 3pm – 8:30pm Thursdays
• 8:30am – 4pm Fridays
• 9am – 3pm Saturdays

There’s no agreement for a shorter minimum break period between shifts. Felix is entitled to a minimum of 12 hours break between shifts.

Felix is asked to stay back and close shop on a Thursday. Felix finishes work at 9pm. The next day, Felix starts work at their usual time without getting a 12 hour break between shifts.

For the hours worked on Friday, Felix gets 200% of the minimum hourly rate because Felix doesn’t get a 12 hour break between their shifts.

Starting work later the next day to get 12 hours break between shifts

If Felix is asked to start later on Friday so they get the minimum break, Felix is still paid from the time they usually start work until the conclusion of their shift at the ordinary pay rate.

Payroll Job Opportunity

With the new financial year in sight Australian Payroll Association is looking to expand it's consulting division - Australian Payroll Advisory. Could you be our next new hire?

Payroll consulting roles

Are you passionate about payroll excellence and looking to take your career to the next level? Australian Payroll Group (APG) is seeking a highly skilled Payroll Consultants and Senior Payroll Consultants to join our Australian Payroll Advisory (APA) practice. APG is dedicated to promoting the highest standards in payroll practices across Australia, and we are looking for dynamic individuals to contribute to our mission of ‘Creating Confidence in how People are Paid’.

About the Roles:

You will play a crucial role in providing expert advisory services to our clients. Your deep knowledge of payroll administration, Australian payroll regulations, tax laws, and compliance will help optimise payroll operations and drive continuous improvement for our clients. This role offers significant decision making authority and the opportunity to influence the direction of consulting projects.

Key Responsibilities:

Consulting and advisory:

• Assess existing payroll processes, systems, and policies to identify improvement areas.
• Provide expert guidance on payroll best practices and process optimisation.
• Collaborate with clients to develop payroll solutions.
• Conduct technology procurement engagements.

Payroll process optimisation:

• Analyse payroll data to identify optimisation opportunities.
• Document and map current payroll processes and present optimised future states.
• Develop and implement strategies to streamline payroll processes and enhance accuracy.
• Design and implement payroll policies and controls to ensure compliance.

Compliance and risk management:

• Stay updated on payroll regulations and tax laws.
• Conduct payroll reviews to ensure compliance.
• Identify and mitigate potential payroll risks.

Stakeholder collaboration:

• Build strong relationships with clients, government bodies, and payroll software providers.
• Communicate effectively with stakeholders to provide updates and address concerns.

Continuous learning and development:

• Stay informed about changes in payroll legislation and emerging trends.
• Participate in professional development activities.
• Share knowledge with colleagues and contribute to continuous improvement.

Qualifications and experience:

• 5+ years of experience in payroll administration/management and operations.
• Demonstrated experience in delivering high quality inhouse payroll management or consulting services.
• Strong ability to prioritise tasks and manage multiple projects.
• Deep knowledge of Australian payroll legislation, taxation, and superannuation requirements.
• Excellent communication and interpersonal skills.
• Familiarity with payroll software systems and proficiency in payroll related technology.
• Strong analytical skills and attention to detail.
• Strong problem solving and decision making abilities.
• Ability to engage in insightful discussions with business executives.

Join APG and be part of a team that is dedicated to excellence in payroll practices across Australia. Apply today to make a significant impact in the world of payroll consulting.

How to Apply: Interested candidates are invited to submit their resume and cover letter to [email protected]

Payroll News: Court sends clear message to employers on having adequate systems, processes and checks in place to avoid underpayments

The Federal Court of Australia (FCA) has handed down a record $10.34 million in penalties against two related entities for various contraventions of the Fair Work Act 2009 (Cth) (FW Act) resulting in substantial underpayments.

The Fair Work Ombudsman (FWO) commenced proceedings against Commonwealth Bank of Australia (CBA) and its subsidiary, Commonwealth Securities Limited (CommSec) after both entities voluntarily disclosed to the FWO the underpayment of entitlements to approximately 7,400 employees between October 2015 and January 2021.

In Fair Work Ombudsman v Commonwealth Bank of Australia [2024] FCA 81, the FCA was required to determine the issue of penalties for the following admitted contraventions:

• The better off overall test (BOOT)

The relevant enterprise agreements contained terms which required CBA and CommSec to conduct BOOT assessments to ensure employees were better off overall in the payment of entitlements under:

• the enterprise agreement against the relevant modern award by conducting reconciliations at the end of each “relevant period” and to make a top-up payment if there was a shortfall; and
• individual agreements against the terms of the relevant enterprise agreement.

Both CBA and CommSec contravened section 50 of the FW Act by failing to undertake the above BOOT assessments, resulting in underpayments of approximately $16 million.

CBA and CommSec further admitted to not taking steps to implement practices and processes to ensure compliance, particularly given senior staff at both entities had been put on notice in December 2015 that they were not complying with these obligations.

This made the contraventions fall within the category of “serious contraventions” under section 557A of the FW Act (which increases the penalties tenfold), being “knowing” contraventions forming part of a “systematic pattern of conduct” over 10 years and affecting a substantial number of employees.

• Individual flexibility arrangement (IFAs) contraventions

Both CBA and CommSec contravened section 50 of the FW Act by entering into individual agreements with certain employees which were not valid IFAs for the purposes of the FW Act.

This resulted in a failure to pay employees their full entitlements under the applicable enterprise agreement, resulting in underpayments of approximately $5.2 million.

The underpaid entitlements included certain allowances, annual leave, long service leave, parental leave, personal/carer’s leave, redundancy pay, payment in lieu of notice, ordinary hours, overtime and loadings.

• False or misleading representations

CBA contravened section 345 of the FW Act by misrepresenting to employees that they would be better off overall under individual agreements than under the applicable enterprise agreement and that the remuneration paid under the individual agreement would satisfy the enterprise agreement entitlements, when neither was true.

The FCA considered the contraventions to be substantial, prolonged and taken by institutions who are large, wealthy and capable of preventing such breaches from occurring.

The FCA found that the obligations on CBA and CommSec were readily able to be complied with, and proper checks to ensure compliance were not hard to implement. The FCA refused to consider the errors and misunderstandings which led to the contraventions, stating that the focus should be on the systems, processes and checks that allowed such a situation to arise and continue on an ongoing basis.

The FCA stated that “the message needs to be loud and clear that this is not good enough and will not be tolerated” and any penalty imposed must be significant enough to deter not only CBA and CommSec, but also potential contraveners in like positions.

Accordingly, the FCA considered general deterrence to ensure compliance to be important in the circumstances, expanding further at [71]:

“What needs to be deterred is a system being left in place that allows for basic errors to be made without an adequate system of checking or detection and thereby correction, and as a result erroneous assumptions made and untenable beliefs held with serious consequences for a large number, if not proportion, of employees”.

The FCA stated that while no penalty within the available range is likely to materially hurt CBA or CommSec given their size and resources, it will likely encourage other institutions who are made aware of the contraventions to pay close attention to compliance and the adequacy of systems for checking in place.

In considering the above, the FCA ordered penalties in the amount of $7.3 million for CBA and $3.03 million for CommSec (totalling $10.34 million), each to be paid within 60 days of the decision. A small discount was applied to the penalties for self-reporting, cooperation with the FWO and admission of liability.

Lessons for employers

The penalties imposed in this decision are significant and are intended to deter other organisations from implementing systems which allow for non-compliance with obligations under the FW Act or where relevant, a modern award or enterprise agreement.

Employers must check that they have adequate systems and processes in place for ensuring compliance and detecting any errors which require correcting action. This could include regular HR practice (such as IFA issuance and BOOT) and payroll spot checking. Workplace Law can support you with a spot checking program – please contact us if you would like to discuss further.

Information provided in this news alert is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

Author: Athena Koelmeyer - Workplace Law

National Payroll Day

A day to thank Payroll - it makes sense ...

How will you celebrate the brilliant work that you do each and every day? Start making plans today ...

National Payroll Day is your opportunity to join your profession in recognition of all the hardworking Payroll Professionals around Australia. On 19 July APA encourages you to mark the occasion by shouting out any great Payroll Professionals in your network and use the hashtag #APANationalPayrollDay to spread the message.

Australian Payroll Association encourages employers to get on board and recognise and thank their payroll teams. Take your payroll team to lunch, talk about career progression in the team and write a thoughtful thank you note!

Raise the profile of payroll in your company, click below to access posters and banners.

Click Here.