FWC proposes penalty rates for work conducted outside of ordinary hours

FWC proposes penalty rates for work conducted outside of ordinary hours

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The Fair Work Commission (FWC) is considering changes to a rule called the Professional Employees Award 2020.

The draft highlights the issue of long working hours and lack of fair compensation for employees in certain industries. These changes would give some workers extra money, called penalty rates, for working extra hours.

The proposed amendment by the FWC to the Professional Employees Award under section 157 of the Fair Work Act 2009 to grant penalty rates for work conducted outside of ordinary hours for tech workers, engineers, and medical researchers, is an effort to address the issue and ensure that these workers are fairly compensated for their additional hours of work.

The FWC is reviewing the Professional Employees Award 2020 to make this happen. The rule has two problems that the FWC wants to fix:

  • It doesn’t clearly say how much extra pay workers should get for working extra hours.
  • It doesn’t cover all workers who do professional work. Many engineers in the construction and consulting industries often work more than 45 hours per week and sometimes up to 70 hours per week without receiving extra pay or time off. 

According to APESMA (Association of Professional Engineers, Scientists and Managers, Australia), engineers within the construction industry have reported that they regularly work more than 45 hours per week. They are paid an annual salary, but they do not receive overtime pay or access to paid time off in lieu (TOIL) for working extra hours.

Furthermore, engineers in the consulting industry have reported that it is common for them to work 60 to 70 hours per week, seven days a week when they have a project in operation or are preparing a bid. The ability to take a break after the project is completed depends on the specific industry in which the engineer is consulting.

The FWC wants to make sure that these workers get extra pay for their extra hours and that the rule covers all workers who do professional work. FWC has established a new standard for determining normal working hours for award-reliant workers by setting 38 hours per week as the benchmark.

This replaces the previous system of allowing employers to calculate the average weekly hours worked over a period of months to determine each worker’s “ordinary” hours.

The proposal

Under the new guideline, employers will be required to pay overtime at standard hourly rates for any work performed outside of the 38-hour window. This applies to various types of work, such as callbacks, work done on electronic devices, or work done remotely.

“The employer must pay a full-time employee the appropriate minimum hourly rate in clause 14 for all hours worked more than 38 hours per week. This must include work on or in connection with call-backs and work performed remotely on electronic devices, the FWC draft said.

Furthermore, If the employee requests at any time to be paid for overtime covered by an agreement but not taken as time off, the employer must pay the employee for the overtime, in the next pay period following the request, at the overtime rate applicable to the overtime when worked.

An employer has to pay an employee extra money (called penalty rates) for working certain hours. The extra pay is for the following:

  • Working before 6 am or after 10 pm from Monday to Saturday
  • Working on Sundays
  • Working on public holidays

What is the Professional Employees Award?

The Professional Employees Award is a set of guidelines that applies to employees working in the following industries:

  • Information technology
  • Medical research
  • Telecommunication services
  • Quality auditing

It does not apply to all people employed within these industries but rather to those who meet the criteria. 

AHRI’s CEO Sarah McCann-Bartlett says some businesses will be asking employees to work on public holidays and to work overtime to cover for those who are on holiday.

“It’s important that employers understand their obligations when it comes to penalty rates, allowances and correct provision of other workers’ rights such as rostered meal breaks,” says McCann-Bartlett. “Employers can be liable for significant penalties if an employee is underpaid, even if the underpayment is unintentional.”

She adds that employers can potentially face criminal sanctions for underpayments, with a Victorian-based company currently the first to have underpayment charges laid under the Victorian Wage Theft Act 2020.

This is the first employer in any Australian jurisdiction to face criminal penalties for underpayments. McCann-Bartlett said all employers should be familiar with the National Employment Standards (NES), which make up the minimum entitlements for employees in Australia.

“An award, employment contract, enterprise agreement or other registered agreement can’t provide for conditions that are less than the national minimum wages or the NES – they must include the NES.

The proposed changes are currently in the form of a draft determination, and interested parties, such as employers, employees, and unions, have until February 10th to submit their views before the changes are formally adopted.

Source.

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