Award pay rates increase and employer PPL obligations commence

by | 11 May 2011 | Bulletin

Minimum wages will increase from 1 July 2011 as a result of Fair Work Australia’s recent decision to increase minimum and award wages by 3.4%. This means that the federal weekly minimum full time wage will increase by $19.40 per week to $589.30 ($15.51 per hour) from $569.90 ($15.00 per hour) and modern award rates of pay (including transitional rates) will increase by this amount or more.

 

Employers should check the Fair Work Australia website (www.fwa.gov.au) for pay rate revisions to modern awards and ensure the appropriate increase is passed on in the first pay period after 1 July 2011. For award based employees, the increase can be absorbed by a standard higher pay rate where there is specific contractual agreement between an employer and employee. For non award employees, the obligation is for employers to ensure that an employee is being paid more than the minimum wage rate for all their hours of work.

 

From 1 July, employers also become responsible for the administration of paid parental leave entitlements for eligible employees. Employers can pre register with the Family Assistance Office (FAO) online (www.centrelink.gov.au/internet/internet.nsf/online_services/index.htm) to enable easier communication with the FAO. If an employee makes an application to the FAO for PPL, and the FAO determines they are eligible, then the FAO will contact the employer to request information to enable payments to be processed. The FAO will make payments to the employer which must be paid to the employee as if the payments were salary or wages. Just to recap some of the main features:

 

  1. Mothers giving birth/parents adopting from 1 January 2011 are eligible
  2. The government will fund PPL at the minimum wage rate ($589.40 gross per week from 1 July) for 18 weeks;
  3. To be eligible a person must:
    1. have been an employee of an employer for at least 12 months;
    2. meet residency requirements;
    3. have an income of $150,000 pa or less; and
    4. have worked for at least 1 day a week in 10 out of the previous 13 months;
  4. To get PPL, employees must lodge claims with the FAO which will assess entitlement and advise employers;
  5. PPL can be taken by an employee within 12 months of the birth/adoption;
  6. PPL does not extend the standard 12 month (+ 12 months on request) parental leave entitlement and supplements any other paid employer leave
  7. PPL can be transferred to a partner if they are/become the primary carer;
  8. The FAO will make PPL payments to the employer in up to 9 fortnightly instalments;
  9. Employers must pay PPL through the normal pay cycle, deduct tax and provide a payslip for the payments;
  10. Employers don’t have to provide PPL to employees until after it’s received from the FAO;
  11. Employers are not required to pay superannuation on PPL and can claim a tax deduction for the payments;
  12. Employees cannot work while receiving PPL but can “keep in touch” with the workplace for up to 10 days, eg training days;
  13. The Fair Work Ombudsman can investigate alleged failures by employers to pay PPL and penalties can be imposed;

 

Further information and brochures can be obtained from www.familyassist.gov.au. Please let us know if there are any particular queries we can assist with.