From 16 September 2023, employees covered by the Professional Employees Award - such as engineers, IT and telecommunications service workers - are entitled to overtime pay and penalty rates.
Currently, the Professional Employees Award requires employers to ‘compensate’ employees for working outside ordinary hours of work, including for call-backs and work performed on the afternoon, night or weekend shifts.
However, unlike other awards, the Professional Employees Award does not mandate the compensation by way of a specific penalty rate (i.e. time-and-a-half, double time etc), and instead allows employers to choose the method of compensation, including granting additional leave, specific additional remuneration, or factoring additional hours into the employee’s annual remuneration.
The changes are a response to concerns about award-reliant employees at lower classification levels, such as younger workers and graduates, working so many hours that they are actually paid less per hour worked than the minimum award rates when all hours worked are factored in.
From the first full pay period starting on or after 16 September 2023, employees are entitled to overtime pay for working more than:
Employers can also request or require an employee to work overtime if the additional hours are reasonable. Factors to consider when working out if overtime hours are reasonable include an employee’s salary or position.
Overtime is payable at the appropriate hourly rate for the employee’s classification (in the minimum rates clause) for all hours worked in excess of 38 hours in a week.
Employers also need to pay an employee overtime for any additional call-backs or work performed remotely on electronic devices, e.g. laptop or phone.
Under the new time-off in lieu (TOIL) clause, employers and employees can agree to an employee taking time off instead of overtime pay. Any agreement to do this needs to be recorded using the template included in Schedule F of the award.
From 16 September 2023, employees are entitled to these penalty rates (applied to their minimum hourly rate under the award) for working at certain times and on certain days:
Employees aren’t entitled to overtime or penalty rates if they receive an annual salary that is more than 25% above their minimum award wage.
This should contain the impact of these changes to graduate-level employees, who are generally paid closer to the minimum award amounts compared to their more senior colleagues.
Employers need to record any hours worked by an employee that are:
This requirement doesn’t apply to employees who receive an annual salary that is 25% more than the relevant minimum annual wage (under clause 14).
Employees performing remote work outside of ordinary hours also need to keep a record (or timesheet) setting out:
This record needs to be provided to the employer within a reasonable time after the work is performed.
The changes to the Professional Employees Award will increase time- and record-keeping requirements for employers (and some employees).
We recommend that you review whether you have employees covered by the award and whether the changes apply to those workers.
You should also commence a full review of your employee remuneration and payroll systems to ensure employees will be compensated for working overtime or hours subject to penalty rates, and that your business has processes in place to comply with these new award requirements.