When assigning Employment Agreements and/or Pay Rate Templates against an employee, the hourly rate of pay is locked. However, sometimes you need the flexibility to deal with the scenario of an employee being paid a higher hourly rate than that contained in the Award.
Employment Agreements and/or Pay Rate Templates are assigned against an employee in their Pay Run Defaults screen. From this screen, there is an 'Override pay rate' checkbox next to the ‘Pay Rate’ field:
Selecting that checkbox will convert the pay rate field to an editable field. You are then able to enter the actual hourly rate paid to the employee:
You can also enter a rate of pay that is lower than the Award, for e.g. if the employee is under a Supported Wage System. In this instance, you will notice the following warning appear:
The system will still allow you to apply a lower rate. The warning is more just to highlight the scenario in case it was done in error.
There is no need to create additional Employment Agreements and Pay Rate Templates. Rather, you can assign the Award’s Employment Agreement (based on the employee’s classification level and employment type) and then just override the rate!
How do linked Award pay categories interact with the new pay rate?
As you know, one of the benefits of installing a Modern Award into the system is the automatic interpretation of employee timesheets. You can also see the full breakdown of each pay category for an employee in their Pay Rates screen.
Upon overriding an award rate of pay, the linked pay categories will “re-calculate” based on the employee’s new pay rate. So, using the example above where the hourly rate was overridden to $23.50 per hour, the employee’s linked pay categories automatically calculate as follows:
You are also able to override the pay rate from this screen. The rate entered here will update the pay rate stored in the employee’s Pay Run Defaults screen.
What happens to overridden pay rates when installing award updates?
It is extremely important to be aware of what happens during this process.
Any employee’s hourly rate that has the “override pay rate” checkbox ticked will be excluded from any Award pay rate updates.
When you go through the process of applying updates or reinstalling the Award, a list of affected employees will be displayed, as per below:
This list is provided to the user to easily identify who the affected employees are. Any pay rate changes for these employees will have to be done manually.
To clarify, any changes or updates made to pay conditions rules will apply to the employees. It is only the employee’s hourly rate that will not update.
Other interesting tidbits
- You can bulk update or change employee pay rates using the Employee Import/Export file. Column AZ is now an ‘OverrideTemplateRate’ setting. To apply any override, the value in this column must be ‘True’.
- Any overriding of pay rates will be reflected in the Employee Details Audit Report.