Trying to do the right thing & pay your employees above Award rates?
Protect yourself from employee claims and double dipping
Myth: An employer can pay above Award wages to an Award employee in lieu of overtime, penalties, loadings and allowance.
Fact: Employers must comply with all conditions of an Award, regardless of wages paid, unless the employer has entered into an individual flexibility agreement (IFA) (or other approved agreement e.g. enterprise agreement).
If you are paying your employees above Award rates and/or other benefits, with no IFA, your business is exposed to future claims by your employees for overtime and penalty rates (public holidays, weekends).
Where there is no IFA in place, disgruntled employees can claim unpaid overtime, penalty rates, allowances, leave loading and/or hours even though they were being paid above the Award rate and sometimes even paid a bonus.
An IFA is a written agreement used by an employer and employee to change the effect of certain conditions of the relevant Award. It is used to make alternative arrangements that suit the needs of the employer and employee.
What you need to do
- Compare each employee’s Award vs IFA benefits to make sure they will be “better off overall”. We have prepared an assessment tool for you to make this comparison. Click here to request this spreadsheet.
- Make sure your IFA meets the legal requirements.
- Offer each employee an IFA as an alternative. Employees cannot be forced into accepting your IFA.
- It is important you get your IFA process right. If an IFA is not made properly the employee may be able to take action for compensation and penalties PLUS you may be liable for penalties of up to $10,800 (individual) or $54,000 (business).
Our Commercial team can help you:
- complete your better off overall comparisons
- provide you with an IFA pack of templates for you to use
- prepare your individual employee IFA documents
- review any agreements you have in place and help you rectify any potential breaches