WorkSight Newsletter
December 1999

Increases in Victorian Minimum Wages

The Australian Industrial Relations Commission has increased all the rates of pay in Victorian Minimum Wage Orders in line with the national wage increases awarded in August 1999.

All Victorian workers covered by a Minimum Wage Order had an increase in pay from the first pay period on or after 10 September 1999 (with the exception of some employees covered by the Agriculture Forestry and Fishing Industry Minimum Wage Order who got their increases from 26 October 1999).

The increases are $12.00 a week for those on rates of pay up to $510 a week and $10.00 for those earning more than $510 a week.

This decision means that all Victorian workers should now have had their rates of pay increased - whether they are on award or Minimum Wage Order rates of pay.

If you are not sure whether you should be giving your employees these increases contact Siân Owen at WorkSight or phone on: 03 9372 8126

Superannuation - who must you pay it to?

You are required by law to pay 7% superannuation to all your employees except those:

Earning less than $450 in a month;
65 years old or over;
Under 18 years old and working 30 hours a week or less;
Working outside Australia for a non-resident employer;
Foreign executives who have been specifically exempted;
Carrying out domestic work or work of a private nature for 30 hours or less a week;
Working as members of the Defence Reserve Forces.

Superannuation is also compulsory for those contractors who are covered by Prescribed Payments System (of tax) and are principally providing labour.

The compulsory element of superannuation will increase to 8% in the financial year 2000/2001.

Finally, it must be remembered that superannuation is paid in addition to an employee's wage not out of it!

Wage increases

The annual average wage increase awarded through employment agreements certified during the June quarter of 1999 was 3.1%.

(Source: CCH/ACIRRT ADAM Report)

When is a contractor really an employee?

It is becoming increasingly common for employers to form contracts with 'independent contractors' to provide a service which a few years ago would always have been provided by an employee.

In some instances this merely reflects the changing nature of the workforce. In other cases it is because the employer does not want to take on the responsibilities of being an employer.

This can be a contentious issue. If the 'contractor' is really an employee the employer can become liable for WorkCover, payment of award level wages and other benefits, superannuation, and must operate within the requirements of the Workplace Relations Act (for instance, in relation to unfair dismissal).

Whilst there is no set test to determine whether a person is a contractor or an employee some of the signs of a contractor really being an employee include the following:

If the employer has a high level of control over the contractor eg in terms of hours of work, the work they carry out, how they do the work, whether the contractor has to ask the employer to take leave.
If the employer provides the contractor with the necessary equipment to do the work.
If the contractor is not allowed to delegate the work to anyone else.
If the contractor has not provided any capital or other resources to carry out the work.
If the contractor does not work for any other employer.
If the contractor does not have a say in how the work will be carried out.
If the employer pays the contractor in the form of wages (eg regular weekly or fortnightly payments, or deducts PAYE tax).

Merely stating that a person is a contractor does not stop the Australian Industrial Relations Commission or the Federal Court from deciding that a person is an employee.

For further information and advice contact Siân Owenat WorkSight - 03 9372 8126.

WorkSight's Web-site launched!

We have recently launched this website - www.worksight.com.au

It holds all of WorkSight's newsletters, allows you to search on specific issues for advice and information and has links to other useful sites for employers. If you have any queries you can easily send us an email from the web-site.