How does the recent 3.50% FWC increase apply to above Award/EA and/or all-inclusive salaries?

It depends on the employment contract/EA. For this reason, the outcome may vary for individuals – so check your documents carefully!

Methods of providing above Award/EA and/or all-inclusive salaries

The usual methods are:

1. Annualised Wage Arrangements – Strict compliance with the applicable Award conditions is required which includes a formal time keeping and annual reconciliation process.

2. Individual Flexibility Arrangements – Strict compliance with the applicable Award conditions is required. This can include non-financial considerations but doesn’t expressly require formal time keeping and annual reconciliation process (although this is still recommended).

3. EA arrangements – EA clauses have satisfied the BOOT and the applicable base rate in the EA is not less the applicable base rate in the Award as amended.

4. Common Law Contracts – Providing remuneration or benefits that exceed the employee's minimum entitlements with express terms that specifically identifies and allows the excess amount(s) to be set off against the employer's liability to pay the minimum entitlement(s) (eg the excess is for overtime or penalty rates).

Who does the increase need to be applied to?

The FWC increase will generally only apply to above Award or all-inclusive salaries if:

• there are express terms promising to do so (e.g. remuneration plus applicable FWC increase each year or similar); and/or

• the Employee’s base rate of pay falls below the applicable minimum (also known as a s.206 breach). That is, the base rate of pay payable must not be less than the base rate of pay that would have been payable to the employee under the applicable Award or National Minimum Wage.

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