Changes to minimum wage calculation brings relief to farmers
General / 25 August 2015
In a move that should have farmers excited, the Government has amended the current Minimum Wage Order 2014 (“Order”) to include a fortnightly minimum wage rate. This comes after the Government, in consultation with unions and employer groups, recognised that employers frequently use fortnightly salary payments.
Current Wage Order
The current Order prescribes only three possible ways to calculate compliance with the minimum wage: hourly ($14.25), daily ($144.00 for an 8 hour day) and weekly ($570.00 for a 40 hour week).
Compliance with the above can often be onerous when payments are made either fortnightly or monthly, as is commonly the case in the agricultural industry.
Take a Farm Assistant on a $35,000 annual salary who works a fortnightly roster of 11 on, 3 off. The employee works 8 hours per working day and is paid a fortnightly instalment of $1,346.15 ($35,000 divided by 26 weeks). Based on the 11 on, 3 off roster the Farm Assistant will work 56 hours in the first week and 32 hours in the second week.
Looking at each week separately (as the current Order currently requires) the employee is paid as follows:
Hours Worked Hourly Rate ($)
Week 1: 56 12.02 (Below minimum wage)
Week 2: 32 21.03 (Above minimum wage)
The new order will take effect from 26 June 2014. Employees must not be paid less than $1,140.00 per fortnight if they work 80 hours in that fortnight. They must also be paid $14.25 for each hour worked over 80 hours.
The addition of a fortnightly minimum wage rate will result in more flexibility for employers who work in industries where fortnightly rosters arrangements are common. Rather than focusing on each week separately, the employer is now able to look at a fortnightly period if that better reflects their payment arrangements.
This change is welcomed by farmers, however be aware the amendment cannot act retrospectively; i.e., prior to 26 June 2014 you need to look at the wages on a weekly basis.
Time and Wage Records – A Legal Requirement
We can’t emphasise enough the importance of keeping accurate, reliable and easily accessible time, wage and leave records. As well as it being a legal requirement, timesheets help identify when an employee is being paid less than the minimum wage.
Please note benefits such as meat, firewood, wet weather gear or milk cannot be used to make up any shortfall in the minimum wage.
Be aware that a wage claim can be made up to 6 years after the fact. In the event there is a dispute the employee is deemed to be correct unless proven otherwise. Where there are no timesheets the employer will be hard pressed to rebut the employee’s evidence.
If you are not actively using timesheets in your workplace we strongly encourage you to introduce them, even if your employees are paid a salary. Progressive Consulting produces timesheets in pads of 50 sheets. These pads can be purchased by contacting Kathy Temple on (03) 218 1854.
Disclaimer: We remind you that while this article provides commentary on employment law topics, it should not be used as a substitute for legal or professional advice for specific situations. We recommend that you obtain legal advice specific to your situation before proceeding and would be happy to help in this regard.