The Fair Work Commission is there to make sure that Australian employers are compliant with their Modern Awards.
Unfortunately, however, these awards end up being so complex and highly specific that we find that many employers aren’t actually complying - especially when it comes to the SCHADS Industry Award.
To add a level of complexity to the pages of legal jargon, the award sets a different minimum wage depending on your employer’s occupation level, qualifications, and experience.
Beyond that, each level has its own pay points.
So, you need to carefully consider what classification your employee falls under because this will determine their correct pay rate.
It’s not enough to just guess what level or pay point your employee sits at. So, to help guide you on pay rates and pay point progressions, here’s everything you need to know.
All employees working in Australia are entitled to a minimum wage. This is the lowest amount an employee can be paid for the work that they’re doing.
In addition to this minimum wage, employees are usually entitled to penalty rates and allowances based on specific working conditions or skills. Allowances and penalty rates are paid on top of their minimum wage.
Each year the Fair Work Commission reviews the minimum pay rates under the different awards , so you’ll need to stay updated.
You can keep up to date by visiting the latest summary on the Fair Work’s award viewer website.
Each modern award contains classification descriptions, which categorise your employees depending on their qualifications, experience and key employment duties.
The minimum wage rate is classified according to the four different groups under the SCHADS Award:
Each group has their own classification levels. For example, under the social and community services group, there are eight different levels of employees relating to their employment characteristics, their responsibilities and the requirements of their position.
For example, a level one social and community services employee will work under the close direction of their employer. They usually undertake routine activities of a clerical and support nature, and they generally receive substantial on-the-job training.
From there, each level increases the employee’s responsibilities and required expertise.
A level four social and community services employee will be someone who can apply the knowledge and skills that they gained through various tertiary qualifications. They usually work in a specific discipline and exercise responsibility for various functions within the work area.
A level eight social and community services employee usually exercises managerial responsibility and undertakes work of significant scope and complexity. They typically have specialist qualifications and substantial post-grad experience.
Each level differs in its minimum wage requirements. So, a level eight employee will earn more than a level one employee.
Back to topTo take it a step further, the award is arranged so that there are several pay points within the different classification levels.
The different pay points allow employees under each level classification to progress from one pay scale to another without changing their classification.
For example, a level one social and community services employee has the potential to move up from pay point one to pay point three - thus increasing their pay scale whilst remaining on the same level of employment.
Several specific sections in the SCHADS award deal with which pay point an employee must start employment on and how progression through pay points is dealt with regarding certain classification levels.
Under this award, there is a section for certain social and community service employees at level one, pay point one to progress to pay point two based on length of service in the industry.
The section mentions that if an employee performs responsibilities under level one and has completed twelve months of industry experience, they can progress to point two.
They also insert sections explicitly relating to the type of responsibilities a level one employee has.
Most employees will start on level one, pay point one and then progress.
However, let’s say you have an employee responsible for a full range of domestic duties under general supervision, including cleaning and food service and helping residents carry out personal care tasks. In that case, they’ll be a level one employee minimum wage rate in accordance with pay point two from the beginning of their employment.
In other words, they won’t start at pay point one and then progress to pay point two. They’ll start at pay point two and have the opportunity to progress to pay point three.
The award also refers to specific pay point progression sections relating to social and community service employees classified under level two.
For example, employees who have completed an appropriate certificate and are required to undertake work related to that certificate will generally be appointed as level two employees.
But if their certificate is a level four certificate, their minimum wage rate must be in accordance with pay point two from the beginning of their employment.
Once they’ve provided twelve full-time equivalent months of satisfactory services, they can advance to the next pay point.
Similar sections operate for level three social and community services employees.
If the employee has a three-year degree and has responsibilities under level three classifications, they must start at at least pay point three.
And, graduates with a four-year degree who undertake work related to the responsibilities under level three must start at least at pay point four.
Similar to certain levels under the Social and Community Services group of the award, there are specific progression regulations for crisis accommodation employees.
For example, graduates required to perform duties relevant to their qualification and undertake work related to the crisis accommodation responsibilities under level four should get paid no lower than pay point two.
While some employee levels make specific reference to specific progression regulations, employers simply have to apply the general pay point progression clause for the majority of employment groups and levels.
For example, levels four to eight for social and community service employees don’t refer to specific pay point progression rules. Similarly, level two and level three crisis accommodation employees don’t have specific pay point regulations.
And neither of the levels under the family daycare stream nor the home care employee stream refers to special progression rules.
So, the general pay point progression clause applies.
The general clause deals with progression through pay points for all levels of employees in each group of the award. In other words, the general clause applies to the crisis accommodation employees in the same way that it applies to the home care employees.
Essentially, the clause indicates that at the end of twelve months of continuous employment, an employee will be eligible for progression from one pay point to the next if the employee has shown competency and satisfactory performance over a minimum period of 12 months at each level within the level.
Not only that, the employee must have acquired and used the new or enhanced skills that they would have attained from on the job training.
However, it’s worth noting that a Federal Court recently explained how pay progression sections in the SCHADS award operate.
The court emphasised the word eligible. So, employees don’t automatically progress from pay points - it’s at the employer’s discretion to decide whether to reclassify employees at a higher pay point.
Back to topIf the Fair Work Ombudsman investigates your business due to underpayment claims, there can be serious consequences if they find out that the business hasn’t been compliant, including:
So make sure you understand how to classify your employees and how to pay them accordingly. It’s also wise to implement a policy that deals with how you’ll consider pay point progressions.
If this is all too much trouble and you'd rather automate the process like many of our clients, you can make the shift over to cloud payroll. If you’re interested, get in touch with us today for a free demo.