The COVID-19 pandemic has forced many businesses to trust that employees can still work effectively from home, but changes being considered by the Fair Work Commission may force employers to track salaried employees’ working hours to the minute.
Work-from-home (WFH) arrangements are a labour of love for many employees, with a recent GitLabs survey finding half of WFH Australians value the schedule flexibility they provide – and that 58 per cent would leave their current in-office job to work from home.
Flexible schedules mean actual hours worked are hard to track, however – and while many employees accept this as part of the give-and-take of remote work, new FWC rules are forcing employers to closely scrutinise the actual hours worked by employees on annual wage agreements.
A recent draft determination set the stage for the change – and since March 1, employers have been required to track breaks and hours worked by staff under a range of awards across natural resources, manufacturing, water, wool, financial services, broadcasting, call centres, and others.
New provisions in the Telecommunications Award, for example, require employers to calculate and document the ‘outer limit’ of how many hours employees’ annualised wages cover – and to pay employees separately for any hours worked past that limit.
An epidemic of unpaid overtime
The changes support the FWC’s response to a spate of underpayment scandals at the likes of Woolworths, Qantas, the Australian Red Cross, retailer Lush, Bunnings, George Calombaris-owned MAdE Establishment, and the Commonwealth Bank of Australia.
Yet the new rules reinforce wage protections for salaried employees – who are usually paid using annualised salaries to avoid the need and administrative burden of tracking hours worked.
Those employees often work under a tacit understanding that they would be paid based on results rather than on hours worked – and have become habituated to late-night emails, overseas conference calls and do-or-die deadlines that require extensive work outside of business hours.
Managers and professionals work an average 6.6 and 4.82 unpaid overtime hours per week, respectively, according to a recent Centre for Future Work analysis that also found those employee groups were the most likely to prefer working fewer hours.
Australian Industry Group and Professionals Australia have engaged with the FWC on the new rules, proposing a system of partial tracking that has reportedly been rejected.
This means companies in tech, and outside of it, need to introduce technology or processes to track the hours worked by salaried employees that likely haven’t filled in timesheets in years.
Time and attendance redux
With the rules applying to anyone making up to $148,700 per year, employers of relatively well-paid technology employees could soon be adrift in compliance paperwork – and grasping for ways to monitor employees, at work and at home, who have probably not filled in a timesheet in years.
Businesses have five options for paying annualised salaries, a recent Corrs Chambers Westgarth analysis noted while warning that the new rules are not ‘set-and-forget’ arrangements and that “employers who use annualised salaries must have strong systems in place to ensure compliance… [by recording] start and finish times and unpaid breaks”.
Does this mean your swish new home office will need to integrate its own Bundy clock to log your every movement? Not necessarily, with new technological solutions offering far less intrusive ways of tracking the actual hours you work.
Sydney-based paper and hygiene system manufacturer Royal Touch, for one, recently disposed of its paper timesheet systems in favour of an automated, hands-free system from NoahFace that uses iPad facial recognition technology to automatically clock its more than 30 employers on and off.
The system, which also includes Android and iOS apps for work-from-home employees, was adopted to improve the accuracy of work records – but, director Dominic Chetcuti said, proved to be “a fantastic attribute” in the COVID-19 pandemic given that it removes the need for employees to touch a common time-and-attendance system.
Fairness or folly?
As economies lean into post COVID-19 economic reinvention, requirements to more closely monitor professionals could dampen the enthusiasm of employers fighting to maintain cohesion despite the challenges of remote working, and to retain staff with flexible workplace arrangements.
Just which employees will be required to comply with the new legislation is still becoming clear, with KPMG Australia Workplace & Employment Law partner James Simpson noting that – despite suggestions employees whose contracts include ‘offset’ or ‘set-off’ clauses may be exempt – the rules haven’t yet been tested in court and they may “be interpreted more broadly”.
In the meantime, employers in tech and other sectors should implement plans to ensure they can document the actual hours worked by salaried employers.
Study FWC guidelines around how to handle underpayments, and make that by year’s end you can both calculate and quickly pay potential gaps between ‘outer limit’ hours and actual hours worked.
Yet companies must not only introduce appropriate technology, but must be aware of the potential impact of such changes on working culture: Australian Payroll Association CEO Tracy Angwin, for one, recently noted that many salaried employees, especially those working from home, are likely to feel micromanaged.
That, she said, “runs the risk of eroding the trust around overtime working hours that has been established between employers and their staff.”