Bridging the Award Interpretation Compliance Gap

Many organisations are in the process of upgrading their existing WFM systems or implementing new WFM solutions to strengthen compliance, replacing manual rostering and timesheet processes. Despite making a significant investment in award interpretation, it is not uncommon for organisations to experience ongoing pay compliance issues. Invariably, they are left scratching their heads wondering how it went wrong.

Most organisations are able to document 'What' an industrial instrument should pay, (e.g. 38 ordinary hours per week for full-time permanent staff, 30-minute meal breaks after 5 hours of work). However, you may run into some ambiguous (tricky) clauses that require internal IR functions and/or an employment lawyer's input to clarify specific payment obligations under the relevant industrial instruments.

For example:

An overtime meal allowance of $16.53 is payable in the next pay period when a staff member is required to perform overtime:

(a) after a break for a meal which occurs after the completion of the staff member’s ordinary spread of hours of work for the day and is not entitled to payment for that break;

(b) after the completion of the staff member’s ordinary spread of hours of work for the day which involves their attendance without a meal break and where the overtime extends to 8.00 pm or beyond;

(c) on a day on which the staff member would not normally perform work and where the overtime period includes a meal break.

Um, say what now?

Here are some of the common mistakes organisations make when documenting the 'What':

❌Relying on the System Integrator (responsible for configuring your chosen system) to provide award interpretation advice;

❌Documenting what is currently paid and not taking the opportunity to critically review current practices; and

❌Ignoring components of an industrial instrument because 'they are not relevant to us' (e.g. Annualised Salaries, rest breaks).

Ensure you are thoroughly documenting the 'What', and conducting workshops with a range of stakeholders including Operations Managers responsible for rostering and reviewing/approving timesheets, HRBP's, Payroll, IR as well as the relevant project resources.

So let's assume you have comprehensively documented the 'What'. Your award interpretation design documentation is detailed, thorough and accurate. What could go wrong, resulting in pay compliance issues? Well, as it turns out, quite a lot. Let's take a look.

Operationalising the 'What' can be tricky. It requires a thorough operational understanding - the realities of how work gets done. Here are a couple of real-world examples:

A meal allowance is payable when 2 or more hours of overtime are worked at the end of a shift without notifying the employee the previous day. This scenario typically occurs when another employee goes home sick without completing their shift, or when there is an unexpected surge in demand requiring additional labor than scheduled. A WFM system doesn't know if the relevant notice has been given, so the rule cannot be automatically applied.

Another example relates to rounding of employees clocking in/out early or late and the FWO's mandate that employees be paid for all time worked. There is a fine line between generous rounding rules to reduce exception management and underpayments for time worked.

In each of the scenarios above the WFM system cannot automatically ensure compliance. In these (and many other scenarios) it supports good business practice which includes educating Operational Managers to ensure they accurately review timesheets and provide comments for auditing purposes where the time recorded is different than the time actually worked (e.g. clocking in 10 minutes early and getting a coffee).

Ensuring accurate award interpretation requires much more than documenting your award rules. They can easily get lost in translation through the build phase and hence require comprehensive functional testing that covers all operational scenarios within your organisation. Whilst training is typically focused on system training, Operational Managers, HRBP's, Employee Experience, and Payroll teams require educational materials and training that focuses on employee entitlements and how to consistently review and approve employee timesheets for accuracy.

Impact HRT has extensive payroll compliance experience across many sectors including Retail, Retail Convenience, Utilities, Tertiary Education, Not for Profit, Resources, Facilities Management, Childcare, and Transport and Logistics. We can help you bridge the gap between the 'What' and the 'How' through your project lifecycle to strengthen governance and improve your payroll compliance outcomes.