Recent changes to the Professional Employees Award 2020
Author: Jennifer Sung, Lawyer
On 20 January 2023, the Fair Work Commission (FWC) published a decision that will significantly amend the Professional Employees Award 2020 (Award) including the introduction of penalty rates, overtime and time off in lieu.
This Award applies to employers in the IT industry, quality auditing industry, telecommunications services industry, as well as employers of professional scientists, professional engineers and medical researchers.
Employers should also be aware that the coverage provisions of the Award will be updated to clarify that the Award applies to employees “performing professional engineering duties, professional scientific duties, professional information technology duties or quality auditing… provided that the employee is not employed in a wholly or principally managerial position.”
Employers in the above industries, and those who hire employees engaged in engineering, scientific and/or IT duties, should closely review the changes summarised below.
The Changes
Currently, the Award only requires employers to pay employees “compensation” for hours of work which would generally attract specific penalty rates or overtime pay in other industries. The FWC decision changes this position moving forward to impose specific entitlements under the Award.
The key changes to the Award will be as follows:
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Overtime/Time Off in Lieu
Employees will be entitled to be paid overtime or receive time off in lieu for working in excess of 38 hours per week. This entitlement applies to all hours worked, including work on or in connection with call-backs and work performed on electronic devices, as well as work performed remotely.
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Penalty Rate for Early Morning and Evening Work
Employees will be entitled to a penalty rate of 125% for all hours worked (whether ordinary or overtime hours) before 6:00 am or after 10:00 pm on any day, Monday to Saturday. For casual employees, this will be in addition to their casual loading.
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Penalty Rate for Sundays and Public Holidays
Employees will be entitled to a penalty rate of 150% for rostered hours (whether ordinary or overtime hours) worked on a Sunday or public holiday. For casual employees, this will be in addition to their casual loading.
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New record-keeping obligations
For record keeping purposes, employers must keep records of all hours worked by an employee in excess of 38 hours per week, before 6:00 am or after 10:00 pm on any day Monday to Saturday, or at any time on a Sunday or public holiday.
The above changes will not apply to employees who are paid a salary that is at least 25% higher than the minimum annual wage for their relevant classification under the Award.
A draft determination has been published by the FWC and it is expected that the amendments will take effect in the coming months.
Key Takeaways
In preparation for the upcoming changes, MST recommends that all employers seek advice to determine whether the changes to the Award will affect its employees and take the following steps:
- Review employee salaries to ensure that it is high enough to meet the new penalty rate and overtime entitlements under the Award.
- Review and update employee agreements to reflect the changes to the Award and refer to the new entitlements where necessary.
- Review record keeping and overtime practices within the business.
If you require any assistance in managing the change or are unsure how you will be affected by the change, please contact MST Lawyers’ Employment Law team on 03 8540 0200 or workplace@mst.com.au.
