New Overtime Rates for Professional Employees

The Fair Work Commission has revised the Professional Employees Award 2020. Samuel Ellemor, Accredited Specialist (Workplace Relations), summarises the key changes and outlines steps for businesses to take.

Introduction

The Fair Work Commission has revised the Professional Employees Award 2020 to introduce new overtime penalty rates and record keeping obligations for employers employing employees that are subject to the Award.

The Award covers employees working in professional engineering, scientific, information technology, telecommunications and quality auditing roles.

The changes mean that, from 16 September 2023:

1.    Employees are entitled to be paid overtime penalty rates for overtime worked; and

2.    Employers have new record keeping obligations with respect to recording the overtime hours that their professional employees are working.

Employers of professional employees were not previously required to pay overtime penalty rates.

Employees and employers do have the option to agree for the employee to take time off instead of receiving payment for overtime. The agreement must be in writing. The Award includes a template form to use to record the agreement to take time off instead of receiving payment for overtime.

Exception to the new provisions

However, the new provisions will not apply if an employee has a contractual entitlement to an annual salary which exceeds the minimum annual wage prescribed by the Award by at least 25%.

This means that the changes do not affect professional employees on higher levels of remuneration.

Steps for businesses to take

If your business employs professional employees subject to the Award, and their contracted salary does not exceed the employee’s minimum rate of pay under the Award by a least 25%, you will need to ensure that you have a method of record keeping so that you can ascertain if your employees are working overtime, and the extent of that overtime.

You may also need to pay additional overtime rates, depending on your arrangement with your employee.

Businesses that already have employment agreements that provide that reasonable overtime is included as part of an employee’s annual salary may not need to pay additional amounts as a result of the changes to the Award.

However, for those employees whose annual salary is less than 25%above the applicable Award minimum rate of pay, businesses will still need to maintain records and carry out reconciliations to make sure that employees are being paid above the Award rates in each pay period.

More information

The current version of the Award can be found on the Fair Work Commission’s website here.

The current pay guide for the Award can be found on the Fair Work Ombudsman’s website here.

How Sharrock Pitman Legal can help

We recommend that employers employing professional employees review their employment agreements and rates of pay in light of the changes to the Award.

If you would like assistance reviewing employment agreements in light of the Award provisions, or would like advice on pay rates, please do not hesitate to contact us on 1300 205 506 or sp@sharrockpitman.com.au.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

For further information contact  
Samuel Ellemor

Samuel Ellemor is a Senior Associate and Accredited Specialist in Workplace Relations Law, with expertise assisting individuals, businesses and not-for-profit organisations across a broad range of employment, commercial and not-for-profit matters. Samuel can be contacted directly on (03) 8561 3316.

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