As an employer, correctly paying your staff should be a top priority. An “award rate” refers to the rate of pay that a modern award stipulates. Additionally, a modern award is an industrial instrument that outlines the minimum pay rates and conditions of employment in a relevant industry or occupation. Fortunately, it generally does not matter which state or territory you are based in, as modern awards cover employees Australia-wide. Nevertheless, this article outlines what award rates you should pay employees in Victoria to avoid underpaying your employees.
What Does The Award Stipulate?
Over 120 modern awards outline the minimum pay rates and conditions of employment in a particular industry or occupation. Some modern awards that may cover your business include the:
- General Retail Industry Award 2020 [MA000004];
- Hospitality Industry (General) Award 2020 [MA000009];
- Fast Food Industry Award 2020 [MA000003];
- Hair and Beauty Industry Award 2020 [MA000005];
- Cleaning Services Award 2020 [MA000022];
- Aged Care Award 2010 [MA000018]; and
- Nurses Award 2020 [MA000034].
As well as outlining the minimum pay rates, these awards may also cover an employee’s:
- hours of work;
- rosters;
- break times;
- penalty rates and overtime rates; and
- allowances.
How Do I Determine Which Award Rates Apply?
To determine the award rate, you must first determine the relevant award that covers your business and your employees. For example, you can use the ‘find an award’ tools produced by the:
Once determined the applicable award, you need to determine what classification your employee fits into. The classifications are essential to “classify” the employees based on their duties and level of responsibility to determine their minimum pay rate. In a modern award, the job classifications are usually found in the pay clause or the schedule.
Once you have determined your employee’s classification, the award will set out the minimum pay rate for each classification. However, a more accessible place to look for the pay rates will be in the award ‘Pay Guide’, which can be found by searching the award pay guide in your internet browser (e.g. “General Retail Industry Award Pay Guide”).
Continue reading this article below the formWhat If I Do Not Pay Employees the Award Rates?
If you have underpaid your staff, you will need to back-pay your employees the appropriate amount. Otherwise, you could face serious penalties.
Alternatively, if a modern award does not cover your employee, their pay rate must be at least in line with the National Minimum Wage. As of July 1, 2023, the National Minimum Wage is $23.23 per hour or $882.80 per week for a 38-hour work week.
As an employer, understand your essential employment obligations with this free LegalVision factsheet.
Key Takeaways
To ensure that you are paying your employees at least the “award rate”, you need to determine:
- if an award covers your business;
- your employee’s classification under the applicable award; and
- the minimum pay rate for that classification.
If you need help determining your employee’s pay rates, our experienced employment lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
A modern award is an industrial instrument that outlines the minimum pay rates and conditions of employment in a relevant industry or occupation.
If you are found to have unpaid staff, you will need to back-pay your employees. Otherwise, you could face serious penalties.
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