Know the type of employment 

Paying employees fairly starts with knowing what type of employment relationship you have with each of your employees.

An employment relationship may be full-time or part-time (permanent or fixed term) or casual.

In creative workplaces, people may have different types of employment in different workplaces depending on project funding, seasons or organisational needs.

Tip:  The type of employment will affect what needs to happen when an employment relationship ends. The Fair Work Ombudsman has lots of information about ending employment including managing performance and warnings.    

Know the legal minimum pay

Knowing the legal minimum pay for each employee is essential. The legal minimum pay is the lowest amount you are legally allowed to pay an employee for their work.

The legal minimum pay is made up of:

• the legal minimum pay rate for that particular employee
• any other monetary entitlements in their award or enterprise agreement.

If you pay an employee a yearly salary, you must check that their salary is at least equal to the legal minimum pay, including extra payments like overtime or allowances.

Creative work should not be undervalued because it is purpose-driven, passion-driven or culturally meaningful. Employees must still receive at least their lawful minimum entitlements.

Tip:  You can pay an employee more than the legal minimum pay — and you may need to so you can match the market rate or to attract and retain the right candidate — but you can’t pay less.  

Know the legal minimum pay rate

To work out the legal minimum pay rate, for each employee you need to know:

• whether your business is part of the national employment system or a state system, and
• whether an award, collective agreement or a minimum wage applies.

If an award or agreement applies, you also need to know:

• the classification level (or grade) that applies to the work of each employee. A classification level is the category or level of the job, based on skills, experience and responsibilities.

An employee’s minimum pay rate can also depend on things like:

• the type of employment — casual employees, apprentices and trainees often have different minimum rates
• age — junior employees sometimes have a lower minimum pay rate.

Tip:  An employment contract can set a rate of pay for an employee, but you still need to know the legal minimum to make sure you aren’t underpaying them. Employees cannot be paid less than the legal minimum, even if they agree to a contract with a lower amount.

Know if other monetary entitlements apply

If you have an award or enterprise agreement that applies to you and your employees, your employee may be entitled to other minimum payments. 

For example, they may get extra payments for working more than their usual hours, or on certain days or shifts.

You need to know when extra payments like allowances, loadings, penalty or public holiday rates, or overtime apply. 

These other monetary payments form part of an employee’s legal minimum pay.

Tip:  Employment contracts may also have extra payments that you must pay. They may be in the employment contract itself, or another workplace policy (such as a travel or flexible work policy) referred to in the contract.

Know the limits on working hours

For most employees, the maximum weekly working hours is 38 hours. Some awards and agreements allow these hours to be averaged over several weeks, and some have a maximum less than 38. 

In the arts, things get busy — during a festival, bumping in a show, or leading up to a launch or an opening. Even during a regular week, it can always feel like there’s more work to be done. It can be tempting to expect employees to go ‘above and beyond’. 

Generally, you can ask your employees to work more than their maximum hours – but within reason, and it may cost more. Employees can generally refuse to work additional hours if it’s unreasonable, and many have a right to disconnect from work.

It’s important to understand how additional hours can impact: 

• pay — hours over the maximum may attract an overtime penalty. For employees on an annual salary, these higher rates need to be accounted for when coming up with the salary.
• safety — excessive hours are a safety hazard. In a compressed period, it can contribute to fatigue and injury. Persistent excessive hours can lead to burnout. It can also be a sign of poor job design.
• superannuation — not always, but sometimes super needs to be paid on the extra hours.   

Excessive hours can also affect workers’ capacity to meet family, community and cultural responsibilities outside work.

Pay your superannuation obligations 

You need to pay superannuation for all your employees (except some young employees). 

Superannuation (or super) is a type of long-term savings for retirement. You pay an amount into your employee’s super fund. The amount is in addition to their wages or salary. 

You need to pay:

• at least the minimum amount of superannuation
• into their superannuation fund
• each payday.

The minimum amount of super is either:

• the Super Guarantee — this is the minimum amount set by law. It is currently 12% of the employee’s qualifying earnings. (Qualifying earnings generally means the payments you make to the employee for their ordinary hours of work, not including overtime.) 

or

• any higher amount set out in their award, enterprise agreement or contract.  

You must pay super directly into the employee’s super fund. You can’t pay super into an employee’s bank account. 

You need to set up a system for paying super. Your system needs to be compliant with SuperStream standards.  

You need to pay super each time you pay your employees and it must reach the employee’s fund on time. The employee’s super fund needs to receive your contributions within 7 business days after pay day.