Annualised salary arrangements continue to be a popular way to pay employees, but recent changes have increased the compliance obligations for employers. 

During MGA’s recent webinar on annualised salaries, members asked a range of practical questions about how salary arrangements can be managed under the General Retail Industry Award (GRIA). Here are some of the key takeaways. 

Salaries Are Still Allowed 

One of the most common questions was whether employees can still be paid a salary. The answer is yes. However, employers must ensure employees receive at least their minimum Award entitlements each pay cycle (or at most each fortnight), rather than relying on annual averaging over a 12-month period. 

Not Every Employee Is Suited to a Salary 

Annualised salary arrangements are generally best suited to employees who work regular and predictable rosters. Where hours fluctuate significantly, or employees frequently work overtime, weekends or public holidays, employers should regularly review whether the salary continues to cover Award entitlements. 

There Is No “Safe Buffer” 

Paying an employee well above the Award does not automatically guarantee compliance. Changes in hours worked, duties performed, classifications or Award rates can all affect whether a salary remains sufficient. 

With Award wage increases taking effect from 1 July, now is a good time for businesses to review existing salary arrangements. 

Accurate Records Remain Essential 

Regardless of how employees are paid, employers must maintain accurate time and attendance records. This includes recording start and finish times, as well as breaks taken. 

Good record-keeping is critical for demonstrating compliance and identifying any shortfalls that may need to be addressed. 

Review Contracts and Monitor Regularly 

Employers using salary arrangements should ensure employment contracts contain clear set-off clauses that specify which Award entitlements are included in the salary, such as overtime, penalties or annual leave loading. 

Most importantly, businesses should continue monitoring salaried employees to ensure their pay meets minimum Award requirements for every pay cycle. 

Need assistance? MGA members can contact our Employment Advisory team for advice on reviewing salary arrangements and ensuring compliance with the GRIA.