I shouldn’t have to pay overtime and penalty rates as I already pay over the award!

If I had a dollar for every time a business owner made this statement, I would be a rich woman!

As business owners it just does not seem right that we must pay a loading of at least 50% and often 100% of an already above award rate when our employees work overtime or outside their ordinary hours.

However, under many modern awards, this is exactly what we are compelled to do. We may convince ourselves that if we get investigated authorities will be satisfied that we have paid over the award rate, but the reality is very different!

Only last week a general store, was fined $40,000 as well as the store’s former manager and part-owner being individually fined a further $5000 following legal action by the Fair Work Ombudsman.

The employees in that case were paid a flat hourly rate for the majority of work performed, resulting in underpayment of casual loadings, weekend penalty rates and overtime rates.

So as business owners what do we do? Let’s face it, even to keep track of what are the ordinary hours of work, when penalty rates apply is hard enough, not to mention other conditions of employment such as allowances.

But all is not lost! What many business owners don’t know is that modern awards now have a flexibility provision that allows the employer and employee to enter into an Individual flexibility Agreement (IFA). Under these agreements when work is performed, overtime rates, penalty rates, allowances and leave loading can be rolled into a standard above award rate! The agreements are relatively simple to implement and don’t require formal registration with an external authority.

Here is the link to the Fair Work Guide on IFAs. Should you want some help in implementing IFAs give ProcessWorx a call on (08) 9316 9896 or at email enquries@processworx.com.au

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