Are You Paying Your Employees Correctly On Leap Days And Daylight Savings Days?
Key Takeaways
- Employers should ensure their salaried employees are compensated for leap days.
- When daylight savings changes, subject to an agreement to the contrary, employees are paid for the time that clocks say they worked and not the number of hours they worked.
- Employers of employees working night shifts on April 7 should check their employment agreements and any enterprise agreements.
Leap Years and Hourly Rates
Modern awards and the National Employment Standards prescribe minimum hourly rates for Australian employees.
If an employee is paid an annual salary equal to exactly what they would be paid if they earned the hourly rate in their award (or the NES), but there was no accounting for leap years – then that employee would be underpaid by one day every four years.
E.g., if you calculated an employee’s annual salary by multiplying the required hourly rate by 37.5 and 52.
Most employers include a buffer when calculating salaries for their employees, which at a practical level means there is unlikely to be an issue.
However, an employee’s modern award may require that the employee is given a document which sets out the calculation used to determine their salary. Employers should be aware that best practice will be to ensure that this calculation accounts for any leap years.
Daylight Savings Payments
The law is that unless there is an agreement to the contrary – employees working during the daylight savings changeover, get paid according to the clock and not the hours that they worked.
Employers should, prior to 7 April 2024, read their employment agreements and enterprise agreements to ensure that they are paying any workers on a night shift the right wage.
If you wish to discuss employment law further than please feel free to contact us on (07) 3220 1144 or email the writer at john@hillhouse.com.au.
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