What you should know before taking on a new employee
When deciding to take on a new employee there are various considerations that need to be explored by you as the employer to ensure that you are complying with all of your obligations.
The first consideration that an employer will need to turn their mind to is whether a Modern Award is applicable to their business, and if so, which Modern Award. Modern Awards are applicable to national system employees. Predominately, private sector businesses are covered by the national system.
Modern Awards are contained on the Fair Work Australia website and there are tools to assist employers in determining which Modern Award is applicable to their industry. They contain employees’ minimum employment entitlements and standards; including minimum wages; penalty rates and circumstances where penalty rates are to apply; leave calculations; casual rates; and allowances.
Employers should ensure that they have carefully read through the provisions of the applicable Modern Award to ensure that they are aware of their responsibilities and obligations.
Position and classification
Once the correct Modern Award has been identified, the next consideration is to determine which classification your new employee falls under. The classification of the employee will determine the applicable minimum weekly wage entitlement for the employee.
Modern Awards contain classifications for employees based on:
• the position to be performed,
• the age of the employee,
• their skill level, and
• their qualifications.
You must closely examine the classifications contained within the Modern Award and compare the classifications to the circumstances of the employee to determine the wage classification for the employee.
Consequences of incorrect classification
Where employees have not been classified correctly and are not receiving the correct minimum wage level, allowances or penalty rates there can be various remedies sought against the employer.
Initially, it is usual for employees to raise their concerns with employers regarding their classification, minimum wage level or penalty rates. It is exceptionally important at this stage to document the employee’s concerns and review the applicable Modern Award to determine whether the concerns are valid. It is key to continue to communicate with the employee regarding these concerns and determine whether a resolution can be reached.
Where a resolution is not able to be reached, the employee can make a complaint to the Fair Work Commission to investigate. The Fair Work Ombudsmen may approach your business to conduct an investigation, which can include looking in to the classifications and wage levels of all of your employees. They may also engage in a negotiation between the employee and the employer to reach a resolution.
Finally, the employee may commence proceedings to recover the difference in wage levels.
How we can help
At Streten Masons Lawyers, we make ourselves available to our clients when they need business advice; we don’t charge for a simple phone call. Should you have any questions in relation to engaging employees, or problems with the employment relationship, please contact us to have a chat about how we can help your business.
Craig Mason – Director