Most real estate employers think they’ve got payroll under control—until a Fair Work audit proves otherwise.
The Real Estate Industry Award 2020 is packed with complex rules, and missing even one condition can result in serious back-pay claims, compliance breaches, and hefty fines.
Even if you’ve never had an issue before, that doesn’t mean your payroll is compliant. It just means no one has checked yet.
Here are six of the most overlooked Award conditions that could be putting your business at risk—and what you need to do to stay compliant.
1. Misclassifying Employees
But Fair Work doesn’t care what’s been “agreed”—if the employee is misclassified, the employer is responsible for underpayments and lost entitlements.
What employers often miss:
- Casual employees cannot be paid commission-only—they must be full-time or part-time with a structured agreement.
- Part-time employees must have a written agreement specifying their hours; otherwise, they may be entitled to full-time benefits.
- Employees cannot be paid below the minimum wage for their classification, even if they’ve agreed to it.
How to stay compliant:
- Ensure employment agreements clearly define employment type and working hours.
- Keep written records for all part-time employees, outlining their regular work pattern.
- Audit casual employee classifications to ensure they are being paid correctly.
2. Underpaying Overtime & Penalty Rates
Many businesses fail to apply the correct rates, thinking they can offer incentives instead.
What employers often miss:
- If a full-time or part-time employee works beyond their agreed hours, overtime applies—even if they agreed to the extra work.
- Weekend and public holiday rates must be applied correctly—it’s not just about offering extra commission.
- Time worked beyond the ordinary span of hours requires penalty rates.
How to stay compliant:
- Pay overtime when employees work beyond their rostered hours or outside ordinary hours.
- Ensure weekend and public holiday penalty rates are applied correctly.
- Maintain detailed time records to prevent disputes over overworked hours.
3. Not Providing Commission-Based Employees With Proper Agreements
A common mistake employers make is putting employees on commission-only pay without meeting the Award’s conditions.
What employers often miss:
- Commission-only employees must be full-time or part-time and meet income thresholds.
- There must be a written agreement that complies with the Award.
- The employer must review commission-only arrangements annually—if the employee’s earnings fall below the required threshold, they must be switched to a base wage.
How to stay compliant:
- Only offer commission-only employment to those who qualify under the Award.
- Ensure all agreements are in writing and include minimum entitlements.
- Conduct annual income reviews to ensure commission-only employees continue to qualify.
4. Failing to Accurately Track Leave Entitlements
Many businesses mismanage this, especially when employees work variable hours or take leave in advance.
What employers often miss:
- Annual leave must accrue progressively—employees don’t lose it if they don’t use it.
- Annual leave loading (17.5 per cent) must be applied unless the employee is on a commission-only arrangement.
- Employers must follow strict rules around excessive leave accruals and shutdown periods.
How to stay compliant:
- Ensure leave entitlements are accrued correctly in payroll.
- Apply leave loading where required.
- Review leave balances regularly to prevent excessive accruals.
5. Ignoring Casual Conversion Obligations
Casual employees must be offered permanent employment if they meet Fair Work’s eligibility criteria. Failing to do so can result in penalties—even if the employee never asked for conversion.
What employers often miss:
- If a casual employee has worked regular hours for 12 months, an employer must offer them permanent employment—unless there are valid business reasons not to.
- Even if no offer is made, the employer must provide written notice explaining why.
- Employees can request conversion, and the employer must respond within 21 days.
How to stay compliant:
- Conduct casual conversion reviews every 12 months.
- Provide written offers where required or document reasons for refusal.
- Keep accurate records of all offers and employee responses.
6. Failing to Keep Payroll Records
Yet, many real estate businesses fail to keep proper records, putting them at risk of investigations and back-pay claims.
What employers often miss:
- Timesheets, pay records, and written agreements must be kept on file.
- Commission structures and overtime arrangements must be documented.
- Payroll audits should be conducted regularly to catch errors before Fair Work does.
How to stay compliant:
- Keep detailed payroll records for all employees.
- Store written agreements for employment terms, commission pay, and overtime.
- Conduct regular payroll audits to ensure compliance.
Avoid Payroll Compliance Mistakes With Pay Cat
If you make a mistake, Fair Work will make you pay for it—literally.
At Pay Cat, we take the stress out of payroll compliance by:
- Ensuring correct Award interpretation and pay calculations.
- Preventing costly payroll errors and Fair Work fines.
- Automating payroll processes, so you never fall behind on compliance updates.
With automated payroll software, you remove the risk of manual errors, misclassified employees, or missed entitlements.
Find out how we can help by booking a demo.