When and how often to pay employees is a question which can affect many areas of a business, with cash flow and employee satisfaction ranking high on the list of factors. But if your company has been doing the pays the same way for what seems like forever, you may be wondering if it’s time to reassess. What are your options?
Start with the award covering your employees, as it will contain rules about when and how often they must be paid. Most awards will include a defined frequency for payment. For example:
- Clerks Private Sector Award 2010 – either weekly or fortnightly, or monthly by mutual agreement
- Restaurant Industry Award 2010 – either weekly or fortnightly, but not on a Friday, Saturday or Sunday, or monthly by mutual agreement
- Vehicle Manufacturing, Repair, Services and Retail Award 2010 – weekly, before the end of work on Thursday, or with the agreement of the majority of employees, fortnightly or monthly
Awards will also often contain a clause to say that payments can still be made in a different timeframe, as long as it is with the agreement of the employees. Awards may also include other clauses, such as how to pay casuals, or how to manage when the normal pay day falls on a public holiday.
For those employees who aren’t covered by an award, then the frequency is more flexible. According to section 323 of the Fair Work Act 2009, it simply states that an employee must be paid “at least monthly”. You are therefore permitted to decide whether to choose weekly, fortnightly or monthly in this case.
When it comes time to actually implement a change, while you won’t need to have your employees approval to start the process, you will need to keep them in the loop. Maria Nikoletatos, Chief Knowledge Officer at Australian Payroll Association, advises “You do not need their “permission” as such but you do need to have your HR team investigate the “Consultative Process” for any major change in the organisation. So basically, you need to provide “reasonable” notice of the change that is to occur and also provide for any individual requirements.”
So if it’s time for your company to make the change, there are options. Just be sure to do your investigations first, to ensure that you are acting within the applicable boundaries.
