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Australia has National Employment Standards (NES) that apply to employees, which outline the minimum standards and entitlements for employees across Australia. The Fair Work Act legislated the NES, which operates Australia-wide. Further to the NES guidelines, a number of modern awards apply to industries across Australia. These awards provide more specific minimum entitlements for specified occupations, including minimum pay rates. This article will guide you on what awards are and what award wages are in Australia.

What is an Award?

An award is a legal document outlining certain conditions of employment, including minimum wages. There are more than 120 awards spanning Australia’s industries and occupations, with certain sectors having multiple relevant awards.

Where an award or an enterprise agreement does not cover an employee, they are award-free and agreement-free. In most cases, minimum entitlements under the Fair Work Act cover those employees.

Who Does an Award Cover?

Awards cover most employees Australia-wide. However, there are many exceptions to this rule. For example, suppose your employee is a manager or high-earning individual, belongs to a certain profession, or is a party to an enterprise agreement. In that case, an award might not cover them. Fair Work Australia maintains a list of all awards.

It can be difficult to determine which awards apply to your employees. Thus, it is common for one workplace to utilise more than one relevant award. For example, if you operate a carpentry business, the Building and Construction General On-site Award covers your carpenters. However, the Clerks – Private Sector Award will cover any clerical staff. As an employer, it is up to you to know which awards apply and what standards these awards provide.

What Do Awards Cover?

Modern awards cover the minimum entitlements that employees of a certain industry receive. For example, awards cover:

  • pay rates;
  • hours of work;
  • penalty rates and conditions; 
  • break times;
  • leave, including carer’s, annual and long service leave;
  • special leave arrangements; and
  • termination notice and redundancy pay.

Ultimately, the national minimum wage and the NES applies to all employees. This application is irrespective of whether an award covers an employee.

What are Award Wages?

Award wages refer to the minimum pay entitlements that those covered by a certain award are entitled to. For example, consider a carpenter working in the building and construction industry. The Building and Construction General On-site Award [MA000020] would cover a carpenter.

The Building and Construction General On-site Award breaks down pay rates in several ways, including by daily hire, weekly hire, casual employees, apprentices and more.

Failure to Pay Award Wages

Awards are not merely guidelines; they are legal requirements. Therefore, breaching an award can result in severe consequences for your business. These consequences can be to your finances and reputation. For example, wage theft includes deliberately underpaying your staff or withholding their wages, which is an offence. In some states, such as Victoria, wage theft is a criminal act. 

However, underpayments might happen because of a mistake or a payroll error. Wage theft does not include mistakes that occur where you have taken due care and diligence. Nonetheless, if you think you have underpaid an employee, you should work out how much the employee has been underpaid and ensure to rectify the error. The Fair Work Commission often deals with non-compliance. 

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Key Takeaways

Many awards apply to industries across Australia. Furthermore, these awards provide for more specific minimum entitlements for specified occupations, including:

  • pay rates;
  • hours of work;
  • penalty rates and conditions; 
  • break times; and
  • leave.

If none of the awards applies, you must abide by the National Employment Standards. If you need assistance understanding award wages, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions

What is an award?

An award is a legal document outlining certain conditions of employment, including minimum pay rates. There are more than 120 awards spanning Australia’s industries and occupations, with certain sectors having multiple relevant awards.

What happens if I do not pay award wages?

Breach of an award can result in serious consequences for your business, both financially and to your reputation. Deliberately underpaying your staff or withholding their wages is considered wage theft, which is an offence. In some states, such as Victoria, wage theft is considered a criminal act. However, mistakes that occur where you have taken due care and diligence will not be considered wage theft.

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