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Employment update – fortnightly averaging now permitted

Geoff Bevan

July 2014 . . . Responding in part to calls from rural employers, the government has changed the law to allow a fortnightly minimum wage calculation.  This change took effect on 26 June 2014.

This likely change was signalled in our recent employment Rural Update.  Before the change employers had to pay their employees an amount equivalent to the minimum wage, taking into account the hours worked and the salary/wages paid in and for that particular week

Under the new law, employers who pay on a fortnightly or monthly basis can now spread this calculation over a fortnight.   That change means that employers are less likely to have to make top up payments when their (lower paid) salaried workers work longer hours in a particular week.

For example…

John’s salary is $33,280, meaning he receives $640 weekly (or $1,280 fortnightly).   He works 30 hours in week one, and 56 hours in week two.  He is paid fortnightly.

Under the old law John needs to receive at least 427.50* for week one (which he did, easily) and $798* for week two (which he didn’t).  He was therefore entitled to a top up payment of $158.

Under the new law John needs to receive at least $1,225.50 for the fortnight, which he did, so no top up is required.  

* The minimum wage (currently $14.25) x the hours John worked during that week.

This is a positive change – the inability to average over a fortnight caused some employers real difficulty, particularly in the rural sector.