18 December 2024
As 2024 ends and 2025 begins a range of changes related to employment law will come into effect, including changes concerning the lowest level classification in Awards, and new criminal underpayment laws. Employers should be aware of these upcoming changes and prepare accordingly.
CHANGES TO MODERN AWARDS
Introductory Level Classification Period
Some Awards currently contain pay rates for introductory classifications or entry level that are less than the National Minimum Wage. From 1 January or 1 April 2025, depending on the Award, the introductory classifications in affected Awards can only apply for a limited time including:
- An initial induction period;
- Time spent undertaking training; or
- Time to gain the basic skills and experience required for the job.
This time limit varies between Awards but is never longer than 6 months. All employment classifications that are not introductory must be paid at least the National Minimum Wage. This change will require employees to progress to the next classification before they have reached the maximum time limit and may be based on employee competency or achievement of a required qualification (employees will generally move to a higher classification based on which ever happens first).
Awards with new introductory level rules from 1 January 2025 include:
- Airline Ground Staff Award
- Amusement Award
- Animal and Veterinary Services Award
- Australian Government Award
- Dry Cleaning and Laundry Award
- Fitness Award
- Food and Beverage Manufacturing Award
- Funeral Award
- Graphic Arts and Printing Award
- Joinery Award
- Live Performance Award
- Manufacturing Award
- Marine Tourism and Charter Vessels Award
- Meat Award
- Pest Control Award
- Port Authorities Award
- Textile, Clothing, Footwear and Associated Industries Award
- Timber Award
- Travelling Shows Award
- Vehicle Award
Awards with new introductory level rules from 1 April 2025 include:
- Horticulture Award
New Introductory Level Rules and Minimum Pay Rates
Some Awards will see changes to not only the maximum introductory level classification period but also the minimum pay rates for some levels. These changes will come into effect on the 1 January 2025 for the following Awards:
- Air Pilots Award
- Aquaculture Industry Award
- Architects Award
- Business Equipment Award
- Cement, Lime and Quarrying Award
- Children’s Services Award
- Concrete Products Award
- Cotton Ginning Award
- Electrical, Electronic and Communications Contracting Award
- Rail Industry Award
- Seafood Processing Award
- Seagoing Industry Award
- Sugar Industry Award
- Wine Industry Award
- Wool Storage, Sampling and Testing Award
New introductory level rule and minimum pay rate changes will come into effect on the 1 April 2025 for the Pastoral Award.
Enterprise Agreements
For employees covered by an enterprise agreement and paid introductory rates, they will be required to be paid in line with the new classification rate under the Award that would otherwise apply for them.
Other Enterprise and Public Sector Awards with changes include:
- Australia Post Enterprise Award
- Australian Capital Territory Public Sector Enterprise Award
- Christmas Island Administration Enterprise Award
- Metropolitan Newspapers (South Australia and Tasmania) Printing Award
- Northern Territory Public Sector Enterprise Award
- Note Printing Australia Award
- Nurses and Midwives (Victoria) State Reference Public Sector Award
- Printing Industry – Herald & Weekly Times – Production Award
- Victorian Local Government (Early Childhood Education Employees) Award
- Victorian State Government Agencies Award
How can employers prepare for the changes:
- Read the list of impacted awards and check to see if these changes may apply to employees in your organisation.
- Check your enterprise agreement to ensure that any introductory rates are aligned to at least the minimum base rate in the relevant award.
- Ensure payroll systems are updated to reflect any new introductory classification periods and pay rates that may apply to your employees.
- Keep up to date on any further changes.
CHANGES TO CRIMINAL UNDERPAYMENT LAWS / WAGE THEFT
From 1 January 2025 intentional underpayment of employee wages or entitlements (wage theft) can be considered a criminal offence. An employer will commit an offence if they fail to pay an employee their full benefit or entitlement (e.g. wages or superannuation). This will be deemed a criminal offence where, beyond reasonable doubt, the underpayment was intentional. Fines or imprisonment may apply to an entity or individual.
Difference between wage theft and underpayment:
Wage underpayments occur when an employee is paid less than their minimum pay rates and entitlements that were owed by their employer – these are typically unintentional and because of a mistake or payroll error.
Wage theft is consequential and occurs when an employer underpays an employee by intentionally engaging in the act or omission of underpayment and intended to cause the employee to be underpaid. Typically involving deception, exploitation and malicious intent.
The FWC can investigate suspected criminal underpayment offences and refer suitable matters for criminal prosecution.
Penalties
The penalties for companies:
- if the court can determine the underpayment, the greater of 3 times the amount of the underpayment and $8.25 million, or
- if the court cannot determine the underpayment, $8.25 million.
The penalties for individuals:
- maximum of 10 years in prison
- if the court can determine the underpayment, the greater of 3 times the amount of the underpayment and $1.65 million, or
- if the court cannot determine the underpayment, $1.65 million.
How can employers prepare for this change:
- Use the Voluntary Small Business Wage Compliance Code, the Fair Work’s supporting guide and cooperation agreements to ensure employees are paid correctly (if you are a small business employer).
- Utilise Fair Work’s free tools and resources.
- Learn more about criminal prosecutions and cooperation agreements through research.
- Invest in technology and systems that integrate payroll, Award compliance, rosters, time and attendance.
- Implement effective governance frameworks to ensure compliance is maintained, as well as continuous monitoring and reporting to ensure that issues are identified and addressed promptly.
OTHER CHANGES:
- 1 Jan 2025 Mandatory Climate Reporting
Many large Australian businesses and financial institutions will need to prepare annual sustainability reports containing mandatory climate related financial disclosures.
- 26 Feb 2025 (unless earlier by proclamation) new FWC model terms for enterprise agreements and copied State instruments.
These new model terms will be in regard to flexibility, consultation and dealing with and settling disputes.
- Portable Long Service Leave in the community services sectors
Legislation to provide portable long service leave in the community services sectors has been passed in NSW, NT and SA (similar already exist in VIC, QLD and ACT). These laws are expected to be implemented in 2025 to provide greater job security, recognition and encourage workers to stay in the sector.
If you would like more information on how these changes may affect your organisation, please contact us via the link below.
