Rates of Pay Guide - frequently asked questions

The Workplace Relations Team will be releasing their Rates of Pay Guide for 2025-2026 for employees under the Health Professional and Support Services Award 2020 and the Nurses Award 2020 in line with the commission’s determinations in July 2025. The Super Guarantee will increase to 12 per cent from 1 July 2025. Employers will need to use this new rate to calculate super on payments made to employees on or after 1 July. 

The Workplace Relations Team has put together an FAQ guide to understand any changes that may be made and any changes you may have to make.  

What do I do if my staff are paid the award minimum rate of pay?
If staff are being paid the minimum award rate it will be necessary to increase their rate of pay to the new award minimum. This means you will need to discuss and confirm with your employees their new rate of pay. Confirmation of their new rate should be communicated in writing via email correspondence or by way of a letter of amendment to their contract. It is really important that you are clear with your staff what the change in rate is and how much it varies by.

What if my staff are being paid above the Award, do I need to increase their hourly rate?
Staff who are already being paid above the Award may not need to receive an increase in pay. It is important that employers refer to the new Rate of Pay Guide to see what the rate of pay has increased to for their classification and pay point levels. If your employees current above award rate is still above the minimum within the guide, you may not need to increase their hourly rate of pay.

How does this impact my employees on a Grossed-Up Wage Contract?
If your team are being paid above the minimum award rate and you are absorbing certain entitlements into their above award rate, you may need to increase their rate of pay to ensure they remain better off under the agreement. It is important that employers continuously review their employees better off overall test (BOOT) calculations to identify if their rate of pay should be reconsidered to accommodate the increases. For our Workplace Relations Toolkit subscribers, the Workplace Relations Team can check how much better off overall staff remain complimentary with your subscription.

When do I need to increase my employees hourly rate of pay?
As the new Award minimum rates of pay will be operative from 1 July, applicable staff will receive the increase in their rate of pay from 1 July 2025. This may mean that some staff will receive two different rates of pay within this time.

For example, if your payment period is fortnightly and you have staff who are paid the award minimum rate of pay, the following rates would apply for the period. 

Are my Workplace Relations contract templates affected? Do I need to purchase new ones?
The Workplace Relations Team has recently sought legal advice on the contract templates.

With the updates in employment legislation occurring over the last two years, we wanted to ensure the contract templates we provide to private practice owners are compliant and up to date with current legislation and award regulations.

As a result of the review there have been some necessary amendments. As a result, previous versions of the contracts are now unsupported and should be retired.

If you are holding version 2.1 employment contracts or earlier the following table will apply in determining the level of risk the practice is likely operating under.

Please note if you are a Workplace Relations Toolkit Subscriber then the Template contracts are free to you as Toolkit subscribers. If you wish to become a Toolkit subscriber or just purchase the contract templates, please contact us. 

Do all my employee contracts need to be reviewed and updated?
Each financial year when there is a pay increase and change in superannuation contributions it can be a great opportunity to review staff contracts and ensure they are up-to-date with current legislation and award references. This may be as simple as updating the modern award title if applicable.

Please be reminded of the recent amendments to the Fair Work Act around casual contracts and casual conversion. The changes make conversion more accessible for casual employees while adjusting the obligations on employers. One of the most notable changes is the eligibility criteria for requesting conversion from casual to permanent employment. The employee must:

• have worked for the employer at least 6 months (12 months for a small business employer who employees fewer than 15 employees) and
• believe they no longer meet the definition of casual employee which is one where:
  • the employment relationship is characterised by an absence of a ‘firm advance commitment to continuing and indefinite work’ and
  • the employee is entitled to a casual loading or a specific rate of pay for casual employees.

It would be advisable for the practice to:

• review their casual workforce and identify employees’ status by reference to the new definition which places emphasis on how the relationship operates in practice
• review template employment contracts for casual employees to remove the operation of references to casual conversion arrangements pre-August 2024
• consider whether your existing casual conversion processes and procedures comply with the new laws and amend them where required
• diarise obligations to issue casual employment information statements. A CEIS must be provided to new casual employees before, or as soon as possible after, they have started employment. It  must also be provided to casual employees at the following times during the employment relationship:
  • for small business employers – after 12 months of employment
  • for other employers – after 6 and 12 months of employment and then after every 12 months of employment.

Are there times when I would not consider an increase?
The simplistic answer is yes, if an employee is being paid in-line with or above the Award and on a performance improvement plan then a salary increase would be inconsistent with the performance improvement approach.

What do I do if I discover I have underpaid an employee?
The most common underpayments occur through payroll error. Let us take a look at the steps that need to be taken when identifying any underpayment of wages. 

1. Determine how long the employee was underpaid
2. Determine how much the employee was being paid and their accrued entitlements
3. Calculate how much the employee has been underpaid
4. Discuss the underpayment with the employee and how the underpayment will be paid
5. Keep up to date with future wages increases.

With the introduction of the wage theft legislation from 1 January 2024, there are proactive measures that employers can take which includes an audit of their payroll system. An audit should include the following:

• an audit of the Award classifications for each employee and relevant minimum rates of pay
• an audit of employment contracts
• an audit of the information provided on the pay-slips to ensure they represent accurately the rate of pay, overtime payments, leave balances and superannuation payments. For further information Pay slips - Fair Work Ombudsman
• check the correct tax and super guarantee contributions are being made Home | Australian Taxation Office

The Workplace Relations Team provide reminders for upcoming changes to current and any new legislation that will impact workplaces in articles in the WR Newsletter. 

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The Workplace Relations Team Toolkit gives you the most up-to-date, relevant and practical support with all employment matters, specifically focusing on medical practice. 

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If you have any questions regarding anything in this article, please contact the Workplace Relations Team on 07 3872 2264 or email us at workplacerelations@amaq.com.au