Dear Reader,

As if modern awards weren’t confusing enough, the phasing in of transitional award provisions is due to begin soon… on 1 July 2010 to be precise!

What are transitional award provisions?

Transitional provisions are included in most modern awards and essentially allow you to “phase-in” increases in wages, loadings and penalties over a period of 5 years.

In a nutshell, this is good news for you – it will lessen the impact that wage increases will have on your business.

But the “phasing-in” process is not going to be as simple as it sounds…

How will phasing-in work?

When the 5 year phasing-in period begins on 1 July, you will need to pay phasing in provision rates for wages, casual loadings, and penalty and shift rates.

In order to calculate the phasing in provision rate, you will need to use the following formula:

Modern award minimum wage rate minus 80% of the transitional amount.

The transitional amount is the difference between the modern award rate and the rate you are currently paying.

And it gets even more confusing when you throw national minimum wage increases into the mix…

For more information on how to deal with this confusing process, check out Charles’ article below. He will take you through a detailed example of how to correctly calculate phasing in provision rates.

And if you would like more information on modern awards, don’t forget to refer to the Modern Awards chapter in your Employment Law Practical Handbook.

Not yet a subscriber to the handbook? Click here for more information.

Until next time…

Claire Berry
Editor
Workplace Bulletin

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Tags: modern awards, provision rates, transitional award provisions