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How to ensure compliance with new minimum wage and superannuation obligations

As featured in the July 2021 edition of Bowls Queensland's Queensland Bowler magazine.

If you've not done so already, there has never been a more important time for your Bowls Club or business to review your employment arrangements, with increases to the minimum wage and minimum mandatory employer superannuation contributions both coming into effect.

Minimum wage increase

On 16 June, the Fair Work Commission ordered a 2.5% increase in the minimum wage. The effect is that:

  • Hourly rates for the lowest-paid part time workers in Australia will rise by $0.49, up to $20.33 per hour.
  • The new full time minimum wage for a 38-hour work week will rise by $18.80 to $772.60 per week.

For many industries, this change will take effect from the first full pay period on or after 1 July 2021.  However, there are some exceptions for industries that have been hit hardest by the COVID-19 pandemic, including the Hospitality Industry. Accordingly, workers covered by the Registered and Licensed Clubs Award will not be entitled to the wage increase until the first full pay period on or after 1 September 2021.

Superannuation Guarantee increase

From 1 July 2021, minimum employer superannuation contributions known as the Superannuation Guarantee (SG) are also due to increase from 9.5% to 10%. This change will affect all employers across all industries from 1 July.

It is important to remember that the minimum SG contributions are calculated based on an employee's Ordinary Time Earnings (OTE), which is the amount you pay to your staff for their ordinary hours of work including things like commissions and shift loadings. Accordingly, it is important to carefully consider whether payments beyond an employee's basic salary or wages, such as termination payments, bonuses, or allowances, may constitute OTE and therefore require the employer to make additional contributions under the SG.

Considerations for Employers

With the changes to the minimum wage and SG, now is the ideal time for Bowls Clubs and other employers to review your employment contracts and any relevant Industry Awards or Enterprise Agreements to ensure compliance with your current obligations. As part of this process, you should:

  • Check whether your Club or your employees may be covered by an Industry Award, and if so, confirm the classification which applies to relevant staff members under the Award, the hourly rates which apply to that classification, etc. The Award most likely to be relevant to Bowls Clubs is the Registered and Licensed Clubs Award, although other Awards such as the Hospitality Industry (General) Award or the Miscellaneous Award may be relevant in some situations.
  • Review the terms of any written employment contracts. In some cases, if the employment contract states that the employee's remuneration includes superannuation, then you may be able to redistribute their overall package by decreasing their take home salary and increasing their superannuation contribution, whilst still paying the same amount in total to the employee. This may be an option for clubs to explore if they are struggling financially to pay the increased superannuation contribution, but obviously it would risk upsetting staff whose take home salary would be reduced. Clubs looking to explore this option would also need to ensure that they comply with any relevant Award.
  • If your Club employs any staff members on sponsored employment visas, you should check with your migration advisor to ensure that you comply with any special requirements. For further information on this, have a look at our recent article on the Mullins website, written by Migration expert, Corina Chen website.

Last words

We understand how taxing it can be to navigate legislation and awards that continue to shift and change – particularly when your employees are asking questions about how these changes will affect their pay check. If you have any questions, or if you want a better understanding of what these increases mean for your club and your employees, please give me a call on 07 3224 0353.

Article written by Matt Bradford (Partner) and Glen Rolley (Associate).

"The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication."