New Record Keeping Rules
New record keeping rules have come into effect for employers employing staff on an annual salary.
In effect these new rules will require you to keep additional records, signed off by the employee, for each pay period ending after 1 March 2020.
The additional administrative burden needs to be considered and you need to put in place a process to collect the additional documentation required.
What awards are affected?
On 12 February 2020, the Fair Work Commission (the Commission) made a determinations 
that added new rules about annualised wage arrangements (also known as annual wage arrangements) in the Horticulture and Pastoral Awards and changed the existing rules for the following awards:
- Banking, Finance and Insurance Award
- Broadcasting Award
- Clerks Award
- Contract Call Centres Award
- Hydrocarbons Industry (Upstream) Award
- Legal Award
- Local Government Award
- Manufacturing Award
- Mining Award
- Oil Refining and Manufacturing Award
- Pharmacy Award
- Rail Award
- Salt Award
- Telecommunications Award
- Water Award
- Wool Award
When will the new rules take effect?
The new rules start from the first full pay period on or after 1 March 2020. So for example, if an employee’s fortnightly pay starts on Thursday, 27 February 2020, these new rules won’t start until Thursday, 12 March 2020.
What other awards will be updated in the future:
The Commission also plans to update the following awards with new rules, but hasn’t set a timeframe yet:
Who do the new rules affect?
The new rules affect full-time employees who are paid an annual wage under one of the above awards.
Part-time and casual employees can’t have annual wage arrangements under these awards.
Employers can still pay all employees an annual salary without using annual wage arrangements in an award, as long as it covers all of their minimum entitlements. Employers should consider getting independent advice to make sure they’re paying their employees enough.
Annual wage arrangement
The fair work commission has developed a template to make it easier to document your annualised wage arrangement.
Annual reconciliations
Employers have to undertake a reconciliation of their employees’ annual wages:
- every 12 months after the arrangement starts
- when the arrangement ends, or
- when the employment ends.
Employers have to make sure their employees have been paid at least the same amount they would’ve been paid under the award if they weren’t on an annual wage, for all the hours they worked.
If an employee’s annual wage is less than the award payments that they would have received, their employer has to pay them the difference within 14 days.
Next steps
- Identify if your employees are covered by one of the affected awards above.
- Document the annualised wage arrangement with all relevant employees.
- Each pay period, complete and have your employee sign a weekly time and wages record.
