Award Wages

Why are Award Wages so Confusing?

Put simply it's because "One Award – Several Interpretations. Hundreds of Awards = One Mess"

The biggest challenge in designing Australian Payroll Software is the number of interpretations of the many industrial awards that exist to calculate the correct award wages for your employees. This point is driven home when you conduct a payroll solutions training course with participants from more than one Australian State. During the course it is not unusual to have 3-4 different interpretations of how a particular award should be applied.

To accommodate these different interpretations, Australian Payroll Software  needs to be designed so that it is not prescriptive – instead the software should provide a way of creating a Payrun using whatever interpretation the payroll manager decides upon.

Essentially in Muli you have multiple elements and each element has a value and a rate and we leave the flexibility to define everything in those terms. 

So a staff member who is paid monthly salary would have just a single element with the rate equal to the annual salary divided by 12.

But for award personnel on wages who are paid overtime then it's up to the organisation whether they have a single rate or multiple rates for the overtime – depending upon what award agreement is applicable to the organisation.

The Muli approach is non-prescriptive. So in an example where an employee worked a 54 hour week, Muli does not interpret this as:

  • so many hours at the ordinary rate
  • so many hours at the time and a half rate
  • and the remaining hours at the double time rate

Instead Muli checks to ensure that the worked hours equals the paid hours, If not then Muli will warn the payroll manager, so they can make any rate changes they wish - but it's a user defined interpretation not a Muli enforced interpretation.

Rostered Days Off

Australian Payroll Software, particularly construction payroll software, has to accommodate  Rostered Days Off (RDOs). These RDO's are numerous and differ by State and organisation.

In the Australian Construction industry we have a “nominal” 38 hour week but we also have the concept of a worked 8 hour day. Some part of each day is apportioned to the RDOs so effectively employees are only being paid 7.6 hours for the day if they live in NSW or 7.2 hours per day if they live in Victoria. To complicate the calculations further some employees get paid for some of their RDO's even though they didn't take the day off. 

Accommodating Allowances

Australian Payroll Software needs to accommodate a large number of allowances because Industrial Awards contain many allowances – some universal, some not so common.

Your software may need to include:

  • cleaning bird dung allowance
  • confined space allowances
  • heavy block allowances
  • shift allowances
  • height allowances

Muli has a capacity of 24,000 pay sequences for allowances, leave, provisions and other elements so it is well equipped to handle award wages.

 

WHERE TO NEXT ?  Select MODULES from the top menu and examine PAYROLL SOLUTIONS for a comprehensive approach to Award Wages.

 

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10 minute demonstration of Muli Payroll covering:

  • Time-sheets
  • Pay Sequences
  • Leave
  • Superannuation

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