42.5 Hour Working week and annual leave

Lknk on 12/05/2015 - 20:15
Last edited 20/05/2015 - 16:41

Hi guys,

So I currently work for a small IT services company. My contract states 8-5 working hours which are 8.5hour days and therefore 42.5 hour working weeks. I'm only paid 5.83 hours of annual per fortnight which works out to 20 days at 7.5 hour days, not 8.5 hour days. Essentially bringing me down to just over 3.5 weeks of annual per year. If I take a day of annual, I'm docked 8.5 hours not 7.5 hours. With these calculations, I'm owed a week of annual for the time I've been at the company.

So from my reading, we have 2 issues.

A. I'm not paid annual on the extra 4.5 hours per week.
B. I shouldn't actually have 42.5 'ordinary' working hours per week. It's not allowed according to the fairwork website.

Thoughts on who's in the right here? Not trying to make waves, I just want to be able to take the time I'm entitled to off. I've mentioned it to the boss and spoke with our book keeper who tells me that I get 20 days of annual at 7.5 hours not 8.5 hours. He has however assured me he'll 'look into it' which doesn't really sounds promising. I'd expect the person who handles my pay to know the ins and outs of this.

Update!
So they've acknowledged the issue and have said I'm owed 4.6 days worth of leave. All informally so I'm still waiting on receiving a proper report of what's being done. I've been told my annual hours will accrue the same however 1 day off will cost 7.6hrs and not 8.5. Still brings the problem of them correctly docking half days / individual hours but I will address that with them if it is an issue.

Education & Work

Comments

  • ExtraSalt on 12/05/2015 - 20:38
    -4

    thats because you are only entitled to 4 weeks per year. Number of hours wouldn't change that. It also sounds like you might be on a Salary. would i be correct? cause 43hrs a week isn't normal.

    • knk on 12/05/2015 - 20:42
      +8

      I'm on a salary, contract states 8-5 though and I am paid 8.5 hours per day on my payslips. Consequently I'm docked 8.5 hours for a day of annual leave.

      Shouldn't I be entitled to 4 weeks per year @ 8.5 hours per day.

      Currently I'm entitled to 5.83 x 26 hours =151.58 hours. Divide that by 8.5 hours and you only get 17.83 days, not 20. Should I be getting 8.5 x 20 per year so 170 per year.

      • ExtraSalt on 12/05/2015 - 20:49
        +3

        oh i get you. I know people who were contracted to 9hr days, and when they went on AL, they were put down as 7.5hrs because it was a standardised day. A few companies (the last 2 I've worked at) have now started displaying AL in Days rather than Hrs to resolve the confusion.

        I hope everything goes your way. Sounds like you put in the hours, so you deserve your leave, and its also a legal obligation that they give that to you. I hope you don't have the same issue with Sick Leave as well.

        • knk on 12/05/2015 - 20:53
          +2

          Yeah, I just want to be able to take 4 weeks off a year and I really want that week of annual I've been short changed. (Been there 3 years)
          Sick leave doesn't even show on my payslips, might need to look into that. It's never been an issue though and I take the occasional day.

      • ozscharfschutze on 13/05/2015 - 22:17
        +1

        Can you take 7.5 hours of leave and not turn up for a day?

        • knk on 13/05/2015 - 23:12
          +1

          Probably, however with how things are currently reflected I'd only be paid 7.5/8.5 of that days regular earnings.

        • Domingo on 15/05/2015 - 09:38

          @knk:

          with how things are currently reflected I'd only be paid 7.5/8.5 of that days regular earnings

          That sounds like an assumption that you haven't validated yet. Check that with your payroll department - I do 8 hr/day timesheets for work but 7.5hr/day for leave and don't get paid less on those days.

        • knk on 15/05/2015 - 10:06

          @Domingo:

          I see, honestly I'm not too fussed how it is on paper as long as it works out right. At the moment though they take 8.5 hours to give me a full day hence the assumption.

      • hamwhisperer on 14/05/2015 - 10:54
        +1

        Ok I thought maybe you were being pedantic over numbers here but reading this, they are docking you incorrectly.
        You're entitled in this country to 4 weeks off (20 business days) of leave, period.

        Many small business's will get you to do extra hours and if you're fine with that (you seem to be) no worries HOWEVER they are definitely docking your leave incorrectly (8.5 hours) and frankly, that's bullshit and likely illegal.

        • knk on 14/05/2015 - 11:15
          +1

          It's an honest mistake, but yes technically illegal. They've been good about it so I'm not too annoyed by it though.

      • [Deactivated] on 14/05/2015 - 20:15
        +4

        I work for a union entitlement call centre. I do these calls all day every day.
        There are two issues:
        1. You signed a contract for a salaried position - your hours and entitlements are what's in your contract and that's about it. Salaried workers on contracts can often have fixed hours of work plus no provision for overtime payments - check the fine print of your contract and have it checked by your Union or Solicitor before you sign it.

        Except for….
        2. The National Employment Standards.
        This is the basic rights of all employees across Australia and cover your basic rights to annual leave, sick leave, parental leave, long service, and your rights in a dispute. Look for more information on the NES at the Fair Work Australia website.

        Basically how Annual Leave works - regardless of your working hours, is when you go on leave you revert to a Mon-Fri week usually calculated on 7.5,7.6 or 8 hour days depending on your contract and whether you accumulate an RDO/ADO or have flexible working hours. Regardless you end up with 4 weeks leave.

        For example: A nurse could be working 6 x 12 + 1 x 8 hour shifts per fortnight for their eighty hours but when they go on leave - they will be rostered Mon-Fri 8-4 with Sat-Sun as RDOs (although nurses get six weeks leave 1 week extra is for shiftwork +1 week is extra for working public holidays)

      • joannatan on 15/05/2015 - 22:27

        how long is your total break per day? from your lunch break, your tea break etc

        • knk on 15/05/2015 - 22:29

          Lunch break 30 minutes if I take it. Tea breaks aren't defined anywhere for me? But if I want to go grab a coffee etc no one cares. I'm on the road visiting clients a fair bit so I'm not really monitored though. Could waste a lot of time if I wanted to lol.

          But anyway on paper it's 30minutes hence the 8.5hr day.

        • joannatan on 15/05/2015 - 22:49
          +1

          @knk: you might need to speak with your HR, ask them clearly, what is your total break time. standard total working hours in Australia is 37.5 hours/week. I do same time as your 9 hours in the office, 1 hour unpaid lunch and 2 * 15 minutes tea break

    • jellykingdom on 13/05/2015 - 16:58
      +5

      Are you sure this isn't due to lunch breaks? All of our site operators (day workers) work 8.5hrs, but are paid 7.6 due to smoke break and lunch break (50min)

      • knk on 13/05/2015 - 23:05

        No my lunch break is 30mins. Also, in the scenario you've described taking a day off would only cost 7.6 hours. It's not so much the hours I'm working that are the issue more that on paper it's 8.5 hour days but I'm only getting 7.5 hrs x 20 days of annual.

  • ESEMCE on 12/05/2015 - 21:15
    +3

    What does your contract say on Leave Earned?
    If it says 20 days, then they're quite clearly short changing you.

    • knk on 12/05/2015 - 21:17
      +1

      It says I'm 'Entitled to 4 weeks' of annual leave per year. On speaking with the (possibly ill informed? ) bookkeeper he said a standard working day was 7.6 hours not 8.5 hence accrual based on 7.6. So they're saying I still get 4 weeks per year, I'm just underpaid for 4 if I take them all. Doesn't sound right to me either.

      • knk on 12/05/2015 - 21:20
        +1

        He went as far as to say I could have 7.6 hours deducted when I took a day off. However I'd be paid for 7.6 hours not 8.5 for that day.

      • ESEMCE on 12/05/2015 - 21:25
        +7

        He'll need to back-calculate your effective hourly pay rate to 7.6 hours per day then.
        Wants to have his cake and eat it.

        • knk on 12/05/2015 - 21:28

          Yeah that's what I'm thinking, it's easier to just start paying 6.54 hours per fortnight from his point of view. I sent an email with all the math from back calculations and I'm owed almost 5 days of annual @ 8.5 hours.

      • halo9 on 13/05/2015 - 16:55
        +2

        I cannot comment on whether you are being cheated or not as I do not have your contract but it is normal for holiday accrual and hours worked to be at different rates. The main thing is if you take a week (or fortnight) off do you get the same pay check as you would have had you worked your standard week (with no overtime)? If yes, then there is no issues.

        In my case I work in mining and am on a salary. My contract states 12 hour days with a 0.5 break, so 11.5 hour days. I am entitled to 20 days off and my holidays accrue and are drawn down in 7.6 hour lots per day as this is the "standard" working week (7.6 * 5 days = 38 hours). The most important part is I get my 20 days a year and when I take them off I get paid the same amount every time. It is just how payroll do it to keep a standard as we have many employees on different rosters/hours. It is a way to simplify the system as we have up to 8 different rosters and as many different working hours.

        As someone mentioned earlier some companies have changed from hours accrued to days accrued due to the confusion it causes. My company did this last year, now each month I work I accrue approx 1.66 days and get 1 day taken off for each day holidays I take. Much simpler.

        If you've had some time off in the 3 years you've been there, check if you got paid the same. If you did then no issues. If you didn't, check for overtime, loading, etc and if still out then look into it further.

        Cheers

  • Lequ83 on 12/05/2015 - 21:54
    +2

    Speak to the Fair Work Ombudsman if you can't resolve the matter directly with your employer.

    Generally you need to accrue leave based on hours worked. 4 weeks is the national minimum standard for annual leave. 10 days is the minimum for personal (sick) leave.

    As for hours of work, the National Employment Standards specify 38 hours. If you earn a lot then there may be an expectation that you are being remunerated for a reasonable number of additional hours.

    Sadly Australia's employment legislation is quite complex and many small (and some large) businesses do not have sufficient resourcing to get it right, I.e. having a bookkeeper interpreting employment legislation rather than a HR specialist.

    • knk on 12/05/2015 - 23:18

      I find most of the time the contracts are based on something like "Office Hours are 8-5" and "You will have a 38 hour week with reasonable overtime" but the expectation is you will work during those office hours regardless of the fact that your contract doesn't state you'll work through them all. It's all in the wording.

      In the above instance though you'd be calculated on a 7.5 hour day and it would actually be reasonable overtime not an 8.5 hour day on paper.

      • anawth on 13/05/2015 - 15:51

        That's because of legal obligations in wording. 38 hour week is the maximum stated (plus reasonable overtime). Reasonable is highly subjective.
        http://www.industrialrelations.nsw.gov.au/oirwww/National_Fa…

        • knk on 13/05/2015 - 16:18

          Yep, had a chat in passing to the boss about it and they're 'looking into it'. Agrees with me that It's currently incorrect though and is waiting for the bookkeeper to come back to us still.

  • dancingbaby18 on 12/05/2015 - 23:11
    +3

    I totally agree. Your company is not accruing leave correctly for you, I am an accountant myself, they have definitely did it wrong. You need contact your payroll department about it, if not successful, agree with other posts, take it to Ombudsman.

    • knk on 12/05/2015 - 23:15
      +6

      Thanks, like Lequ83 has mentioned it's probably an honest mistake due to incompetence / lack of resources. I have my head around the ins and outs of how this should be calculated so should I need to I'll explain it in great detail to them.

      Ombudsman / outside intervention I will try my best to avoid, not great for the relatonship and I think I can get by without it.

      • macrocephalic on 15/05/2015 - 08:04
        +1

        It's not really a very complicated issue though - I'd be concerned if the bookkeeper couldn't wrap his head around it.

        • knk on 15/05/2015 - 10:09
          +1

          Concerned I am.. As long as I remain on top of it going forward it'll be fine though.

  • Melburnian on 12/05/2015 - 23:54
    +4

    I imagine that you should get 20 days of annual leave, paid at the same amount as though you worked those 20 days. That's the overall aim, regardless of what they have to do with accrual to achieve it.

    Agree that it's probably an honest mistake and not malice, and that resolving internally rather than escalating will be best for your relationship with your employer.

  • Wonka on 13/05/2015 - 07:37

    How long are you taking for lunch?

    • knk on 13/05/2015 - 07:52

      30 mins in contract mostly don't take it.

      • Wonka on 13/05/2015 - 08:06

        & Your working hours are also specified in the contract, so it says something like this? I.e. start at 8am finish at 5pm with 30 minutes for lunch?

        The National Fair Work system has it pretty explicitly stated about the maximum hours: http://www.industrialrelations.nsw.gov.au/oirwww/National_Fa…

        "Maximum weekly hours of work - 38 hours per week, plus reasonable additional hours."

        In regards to your leave:

        "Annual leave - four weeks paid leave per year, plus an additional week for certain shift workers."

        It's hard to say without seeing the actual contract; or knowing what the workplace culture is like where you work.

        • knk on 13/05/2015 - 08:31

          Yeah, I'd need to check the exact wording but on my payslips I'm paid for 8.5 hour days not 7.5 hour ones. So regardless something is wrong, either I should be just doing 7.5 with 'reasonable overtime' ie extra hour per day or I should have more annual.

  • cypher67 on 13/05/2015 - 08:39

    Leave is not directly linked to the number of hours you work, but the number of days you work. Contract would state a fixed number of weeks leave per year (4 weeks) regardless to the number of hours you work a day. If you signed a contract stating you work 5 hours a day or 12 hours a day it doesn't matter, 4 weeks leave would still mean you are getting the equivalent amount of time off, if its 20 days x 5 hours 100 hours off paid, or 20 days x 12 hours 240 hours off paid. You will still being paid at your normal weekly rate based on the number of hours you agreed to work. If you are on salary, you generally dont get paid overtime and you are not compensated in annual leave for any additional hours you do.

    • knk on 13/05/2015 - 08:41

      Correct in not being compensated for annual in my situation but that is the norm these days unfortunately.

      I'm going to have a chat with fairwork just to be 100% sure and I'll bring it back up with the boss end of the week if I don't hear anything further.

      • cypher67 on 13/05/2015 - 08:44
        -5

        So when you are proven to be wrong, are you going to apologise to all the people you called incompetent & ill-informed?

        • knk on 13/05/2015 - 08:46

          I'm not wrong, you've actually agreed with me. You've said "You will still being paid at your normal weekly rate based on the number of hours you agreed to work". However I'm paid 20 days annual at 7.5 hours per day. I have agreed to work 8.5 hours.

        • cypher67 on 13/05/2015 - 08:50

          @knk: A salary would be agreeing to work for a set annual fee / daily rate, these are always calculated at 38 hours a week regardless to the number of hours you work and 7.6 per day is the agreed standard. If you have agreed to work 8.5 hours a day that is your choice, nothing to do with how your pay is represented on your payslip. I am on a salary being paid 38 hours a week and do more like 50, you do whatever is required to get the job done because that's what you agreed to do.

        • knk on 13/05/2015 - 08:56

          @cypher67:

          Contract wise that's what it is, a dollar figure. There's no mention of 38 or 42.5 hours in the contract, my payslips are the only place to reflect this.

          In your situation it would be like you doing 50 hours, having your wage diluted down and spread over the 50 hours but only being paid annual for 38.

        • knk on 13/05/2015 - 08:57

          @knk:

          TCM9669 has hit the nail on the head below.

        • cypher67 on 13/05/2015 - 09:40
          -1

          @knk: The nail was missed, see my response

        • Grillman on 14/05/2015 - 11:40

          @cypher67: But you just said you agreed to 38 hours per week?

        • knk on 14/05/2015 - 12:09

          @Grillman:

          I agreed to get paid a salary and work the hours stated.

          Let's say that salary works out to $2000 per fortnight. If I take 4 weeks off end of year I should be paid out $4000. This isn't the case, I'd be paid out (7.6/8.5) x $4000.

        • Grillman on 14/05/2015 - 12:22

          @knk:

          That was a reply to cypher,

          he says that he is on a salary being paid a 38 hour week but does more like 50, he then says he does it cause he agreed to do it. But isn't it the 38 hour week he agreed to?

        • knk on 14/05/2015 - 12:25

          @Grillman:

          From what I've learnt through this little exercise.

          An employer can't make you sign on for more than 38 hours plus reasonable additional reasonable overtime. What is reasonable is subjective.

          So in cypher's case it's probably a verbal agreement that he'll work however long it's required to fulfill his duties. If it were on paper he could probably take them to court for not paying him correctly.

        • BartholemewH on 14/05/2015 - 21:00
          +1

          @cypher67:
          I work 38 hours salaried plus an extra 5 hours a week in exchange for a car and fuel. Anything above 43 is my gift to them. It appears on my payslips as 7.6 hours a day.

  • Tcm9669 on 13/05/2015 - 08:50
    +1

    I work 8.5 hours a day. 30 mins unpaid break. I get AL of 20 days a year, 5 days every 3 months. AL is taken out 8 hours per day for me, so I get 40 hours every 3 months / 13 weeks. If your working hours are 42.5 hours every week, then every 3 months you should get a week off - therefore you should get 42.5 hours of AL every 3 months. If they are giving you 5.83 hours per fortnight, they are ripping you off BIG TIME (that amounts to 37.895 hours every 3 months, ripping you off about half a day every 3 months)

    • cypher67 on 13/05/2015 - 09:40

      I think we are getting lost in the math but I'll dive in anyway. If your work only pays you for 38 hours a week then you should only need to use 38 hours of annual leave to take a week off. So at 5.83 hours a fortnight you get 151.58 (5.83 x 26) hours a year. 4 weeks AL at 38 hours a week is 152 hours required. Assuming there is some rounding with the 5.83 you are getting the correct amount of leave or if anything losing around 25 minutes a year. The fact he actually spends 42.5 hours a week at work is irrelevant on Salary

      • knk on 13/05/2015 - 09:46

        Yeah what you've said is all on point however I don't just spend 42.5 hours per week at work it's also reflected on my payslip and is treated as a working week. (85 hours per fortnight on my payslip)

        Basically my work should be paying me my salary based on a 38 hour working week, and a day off as you stated consumes 7.5. This is regardless of the fact that I do an extra hour per day, that would be reasonable overtime.

        For me a day off consumes 8.5 not 7.5hrs.

        Where I probably wasn't clear: My salary is calculated hourly on my payslips, spread over the 42.5hr week. If it were 38 with reasonable overtime it'd all work out.

        • cypher67 on 13/05/2015 - 09:54

          I can only go off what you are saying and can only tell you how it should be going down. Salary is not an hourly rate, you could work 100 hours in a week and you wont be paid any extra I am assuming, you may get time in lieu but not extra cash. I find it hard to believe that you are required to use 42.5 hours of annual leave to take 1 week off, if this is indeed the situation I would be asking them to reflect 38 hours a week on your timesheets rather then the 42.5 you work. I apologise if you are indeed being shafted on this front, but by everything you have said sounds standard practice, apart from being required to use more then 38 hours to take a week off.

        • knk on 13/05/2015 - 09:58

          @cypher67:

          I appreciate that.

          I'm indeed being shafted, 5.83hrs accrual per fortnight and 8.5hrs to take a day off. I'm sure it will be resolved, will update when I have results.

          Appreciate all the information from everyone.

  • dasher86 on 13/05/2015 - 10:31

    What it seems like for me is that they are incorrectly calculating your annual leave days. It should be taken out at 7.6 hrs not as 8.5 hrs.

    This solves the problem of accruing based on your actual working hours rather than the standard 38 hr week.

    • knk on 13/05/2015 - 10:35

      Agreed. Problem is if they do that now with the way they have everything I'd actually be paid less.

      • BartholemewH on 14/05/2015 - 21:04

        Yes they're need to work out your salary based on a 38 hour week and reflect that 38 hours on your pay slip.

  • coin saver on 13/05/2015 - 11:27

    D0 you take PDO's or RDO's ? If so you are missing these out of your calculations.

    • knk on 13/05/2015 - 11:29

      Nope, if I take a day off its taken from my annual leave.

  • rompastompa on 13/05/2015 - 11:33

    Sounds like you should be taking 1.5hr lunch breaks ;)

    • knk on 13/05/2015 - 11:42

      That would still mean I'm short changed since my wage is diluted down over 8.5 hours. Love the enthusiasm though lol

  • MementoMori on 13/05/2015 - 11:37
    +1

    I would continue to check this out. I've found very often people working in payroll get this all wrong. You think they'd know.

    I even saw a situation where someone in payroll was entering 8.30 hours for 8 hours + 30 minutes! (whereas it should be 8.5 hours).

    • knk on 13/05/2015 - 11:43

      You can't do anything for but laugh with rubbish like that can you.

      • MementoMori on 13/05/2015 - 11:44

        It's sad when you end up learning payroll legislation better than they do in order to correct the situation!

        The really sad thing is it took me quite a while to explain how there are 60 mins in an hour and fractions etc… she got all angry and upset too!

        • knk on 13/05/2015 - 11:48

          Yeah the worrying thing is that it doesn't take very long to get your head around these things. Says a lot for the people who are in the profession and are getting it wrong. I'm sure that's across all industries though, good and the bad.

        • coin saver on 13/05/2015 - 11:56
          -3

          Yeah the worrying thing is that it doesn't take very long to get your head around these things.

          It has taken you three years so far.

        • knk on 13/05/2015 - 12:01

          @coin saver:

          I meant more so in order to workout whether I was right or wrong I this instance.

          But yes, ignorance / trust on my part has let this continue for 3 years.

        • johnno07 on 14/05/2015 - 09:52
          +2

          @knk:

          Says a lot for the people who are in the profession and are getting it wrong

          But yes, ignorance / trust on my part has let this continue for 3 years.

          For these two reasons, I treat everyone I deal with as useless until proven otherwise. That is, until they can actually show me they are competent at what they do, I assume they are incompetent. This tenet has saved me a bunch of time and money.

  • chatterbox on 13/05/2015 - 15:06

    One hour is for lunch which is unpaid if you are on a salary

    which brings it down to 7.6 hrs a day or thereabouts

    • knk on 13/05/2015 - 15:07

      Mines 30 minutes, = 8.5 hour days for me.

  • uccoffee on 13/05/2015 - 17:33
    +1

    sound like they cheat, just talk to HR and try to fix it, if they dont want to fix it, then document every thing, and talk to fairwork when you leave the company :) you can even ask for the Overtime $ too.

  • derpdeder on 13/05/2015 - 18:46
    +2

    Annual leave accrues on your ordinary hours of work. If your ordinary hours of work are 8.5 hour per day then your leave must be taken as an 8.5 hour day, and accrue substantially enough to cover this 8.5 hour day.

    Your contract most likely says in your leave entitlements part "4 weeks of annual leave." Four weeks of annual leave for you is 4 weeks of 5 days at 8.5 hours per day. You need to accrue 170 hours of leave per year to cover this or 6.54 hours per fortnight on your pay slip.

    Anything less and you are getting short-changed and I would be chasing it as far back as your employment started as, if the facts you've told us are correct, are owed more than 50 hours (or more than another week in your upcoming holiday).

    • knk on 13/05/2015 - 23:17

      This is exactly as I've calculated it :).

      I'm currently waiting for their 'solution' whether that is extra accrual or dropping down to 38hr weeks on paper I'm not sure.

      Either way I have been assured a complete review of all pays will take place and I'll get my extra leave. It should be more than I've stated before, probably over a week. I thought the problem had only occurred after a system change however it appears it has always been out…. Just not as far out as it currently is.

  • T1OOO on 13/05/2015 - 19:28
    +1

    Happens all the time. Either a mistake or a bad boss. And make sure that they don't count public holidays in your annual leave. :-)

    • knk on 13/05/2015 - 20:14

      They mean well, it's a simple 'that's what the accounting system said' scenario. Getting them to understand it is difficult though. Making progress!

  • saiandkid on 13/05/2015 - 20:11
    +1

    Sounds like they are accruing your AL based on 7.6 hours ordinary time per day.

    If that is the case then:

    1. you are working 8.5 hours per day, the extra time may need to be paid at overtime rate depends on the contract.

    2. when you are taking an annual leave off work, they should only deduct 7.6 hours out of your accrued leave. Definitely not 8.5 hours.

    You need to work with your payroll officer/bookkeeper to find out what is your true accrued leave is (in days preferably).

    • knk on 13/05/2015 - 23:11

      I don't see overtime being paid, nor do I expect it. Would be nice though.

      In no. 2 it'd get tricky since if I were to take for example 3 hrs it'd need to be calculated as 7.6/8.5 x 3hrs to get the effective hourly value. I think it all needs to be recalculated on a 38 hour work day as per fairwork. This way my extra hour would be classed as reasonable overtime?

      • saiandkid on 14/05/2015 - 21:24

        It really comes down to what is the ordinary working hours in the contract and what is the standard pay.

        Senario 1: the ordinary WH is 38 per week (i.e. 7.6 per day), and your standard pay is for 38 hours of work. The 0.9 hours considered unpaid OT. When you taking annual leave for a week, under this case, you should receive full week's standard pay and your AL accrued is reduced by 38 hours.

        Senario 2: the WH is 38 and your standard pay is 38 hours PLUS the OT you worked. When you took a week of annual leave, the pay you received will be less as it will not include the OT pay you would earned normally. Your leave accrued is also reduced by 38.

        In either of the cases, if you took 3 HRS of AL, your pay will be different depends on your standard pay structure. Still best to contact with your payroll staff to find out.

  • Wyn-Ryder on 13/05/2015 - 23:15

    How does your hourly rate work out against your contract salary? Does 52 * 8.5 * 5 * hourly rate approximately equal your salary? If it's higher then you may be getting paid overtime, and your annual leave could be correct.

    • knk on 13/05/2015 - 23:18

      This is something I have been more clear about I addressed it in a comment above.

      52x8.6x5 equals my agreed salary. No overtime here, so I'm down a few days of annual.

  • Tarnos on 14/05/2015 - 08:52
    +1

    This is the same in my company. I am also assigned 8am to 5pm with half an hour break. It also shows my working hours on the payslip as 7.6 hours instead of 8.5 hours. Ditto with annual leave being 7.6 hours.

    Obviously companies are doing it so they pass the "fair work" aspect on the payslip but realistically you are agreeing to work longer hours as per the contract you signed. This has probably been going on for a long time in my company and no one really complains (company hires about 60 people and many have been here for over 10 years).

    In this current economy I wouldn't be complaining if you like your job. Or maybe just ask for a higher salary to compensate if you feel cheated.

    • knk on 14/05/2015 - 09:10

      Not complaining, happy to work the hours and don't feel cheated doing 8-5. Don't even want a higher salary, just want 20 days of annual.

      Either I need another 18 hours of annual per year or my 'day' should be formally listed as 7.6 hours.

      • Tarnos on 14/05/2015 - 09:40

        Hmm but you are getting 20 days per year. Here is how I worked it out:
        There are 52 weeks in a year, so that is 26 fortnights a year.
        You are getting 5.83 hours per fortnight: 5.83 * 26 = 151.58 hours

        This is where you are concerned. The company records 7.6 hours as the work day. It is the same for me. My 8.5 work hours are recorded as 7.6, so therefore my annual leave is 7.6

        This leaves 151.58/7.6 = 20 days of annual leave per year.

        • knk on 14/05/2015 - 09:43
          -1

          I'm not actually getting 20 days of my ordinary hours though.

          My salary is 52x8.6x5 , not 52x7.6x5. So I actually need 170 hours of annual to make up 20 days.

          Your scenario is how it should be in my mind.

        • Tarnos on 14/05/2015 - 09:53

          @knk: I get you knk.

          My main point is that you are getting 20 real days of annual leave that its equivalent to everyone else under salary. That means you can plan 4 weeks of real holiday (assuming there are no forced closures during Christmas, Easter, RDO, etc.)

          However, it doesnt match your actual working hours - ie, you feel cheated. I used to feel the same but I figured getting a higher salary out of it was the better way to go.

        • knk on 14/05/2015 - 10:25

          @Tarnos:

          Yeah, however If I took 4 weeks I'd be down around 12% of my pay for those 4 weeks unfortunately. Since I'm on salary with no overtime I'd expect it to remain the same.

          I think we're on the same page, higher salary would be nice though!

  • DarkOz on 14/05/2015 - 13:03

    knk,

    I hope my case helps you out.

    I am on Salary and I work 10 hours a day 6 days a week. That 10 hours day includes 0.5 or 1 hour lunch time which was not specified in the contract. Sometimes I take 0.5 hour lunch when I feel like working and sometimes I take 1 hour lunch when I am tired.

    I receive 4 weeks(24 days in my case) annual leave each year with 10 hours per day. That means my annual leave accrues by 9.23 hours a fortnight (10 x 6 x 4 / 26).

    I believe that if you are on a Salary your annual leave day should be the equivalent of your normal working day unless your contract states otherwise. The minimum hours of 7.6 annual leave day normally applies to wage workers.

    My employer is very tight with pays. At least they did me right on my annual leave.

    • knk on 14/05/2015 - 13:41

      Thanks DarkOz,

      That is how I believe it should work. In the end the way they calculate it isn't really a big deal, as long as it adds up to 4 weeks like yours does.

      I'll update when I have a result!

      • DarkOz on 15/05/2015 - 06:20

        In the end I think it all comes down to the definition of "4 weeks annual leave" in your contract. Is it your normal working week or five 7.6 day. If it's not specified you have a good chance at least to negotiate.

        Good luck.

  • pjpearson on 14/05/2015 - 16:15
    +7

    Hi All, first time poster but long time viewer.
    Firstly, I work in HR/IR and hope I can clarify a few things. Firstly, you've got to take the maths out of this. The rules around the accrual of Annual Leave are linked to the definition of Ordinary hours of work under the Fair Work Act 2009. Firstly, the maximum ordinary hours of work under the Act are 38hrs per week, with additional hours able to be worked. Secondly, under the Act the accrual of Annual Leave is progressive against the ordinary hours of work of an employee, therefore the accrual should be presented in hours not days. So, if the maximum ordinary hours of work under the Act is 38 you can only accrue Annual Leave based on 38 hours of work each week. Work beyond the maximum 38 hours can be refused by an employee on reasonable grounds, and where there is Award or Enterprise Agreement coverage (there must be one) penalty rates may apply for the additional hours unless the salary paid to an employee covers those additional hours.

    So in short, the maximum ordinary hours of work per day over a 5 day week is typically 7.6 hrs (NOT 7.5!), which when multiplied by 5 gives you 38hours. 7.5 x 5 = 37.5.

    The problem is some employers are overcomplicating the payroll to try and recognise the additional hours worked by employees. The Act already provides for an additional week of leave where an employee is a shift worker. Annual leave loading is also a typical provision in awards, which is provided to compensate employees for not receiving penalty rates when they might otherwise do so in their ordinary salary. So the mechanisms are there to properly remunerate people for the extra hours.

    The payroll should reflect the legislation. In short the system your employer is using to record hours of work AND leave is incorrect. Ordinary hours is always a maximum of 38 hours. Anything beyond that should be recognised as overtime if it is provided for. Otherwise, if you are salaried , you should be paid according to a 38 hour work week, with the right to refuse to work additional hours on reasonable grounds.

    From what you have said, the fact that you are being deducted 8.5 hours leave each day is incorrect given the ordinary hours of work on that day should be just 7.6 (although you are working longer). The hours you are working beyond the 7.6hrs per day should not even be shown on the payslip unless it is to recognise overtime. Everything in your pay and accruals should be based around a 38hour work week if you are being paid an annualised salary.

    Also, if you don't have a copy of the Modern Award or Enterprise Agreement that covers your employer, you should source one as this determines the minimum conditions they must comply with by law.

    Good luck with it.

    • knk on 14/05/2015 - 16:22

      Thanks for the detailed response.

      I'll see what happens when they come back to me.

      Curious, would I have a case for additional hours being worked and required to be paid out since they are on payslips dating back for 3 years? I'd be owed over 10k if those hours were underpaid and should be paid at time and a half. I don't think I'd ever actually do this unless I had a falling out or were poorly treated going forward though.

      • pjpearson on 14/05/2015 - 18:02
        +3

        Only if the award or enterprise agreement you are employed under provides for overtime, and then only if your salary is paid against the minimum rates rather than an agreed salary rate that has already accounted for overtime through the payment of a higher hourly rate than the minimum.

        The only way you could determine that for certain is to have someone review all he documents I have mentioned and then compare your remuneration against the terms of those documents. An employer could argue you had a right to refuse the additional hours but elected not to.

        • knk on 15/05/2015 - 13:06
          +1

          Yeah it's not something I'd see myself pursuing.

          However something else has got me curious, if I were to have "38 Hour" weeks on my timesheets going forward and I'm doing 42.5, would I have a reasonable grounds to say if I were to need to leave an hour early etc they didn't have the right to take it out of annual? At the moment they're very pedantic over everything like this albeit being very flexible when it's required.

        • tanoshiiki on 19/05/2015 - 19:05

          @knk:
          Depends on your employer's policy (and any overarching enterprise agreement). You might be able to get a time in lieu situation, where any hours worked more than your normal hours can be accrued and can be taken off in unpaid leave.

        • pjpearson on 01/06/2015 - 15:23

          @knk: The way it all works is that you cannot be "required" to work more than 38 ordinary hours per week and you have a right to refuse hours beyond 38 ordinary hours per week on reasonable grounds (like family reasons etc).

          Technically, if you were asking to leave work for the 39th hour or beyond I would argue they should be allowing you to leave without deduction from any form of leave.

          Edit: Good to hear you've made some progress on the issue. Really they should just be abandoning anything in the payroll that refers to 42.5hrs per week. That will solve a lot of their issues.

    • T1OOO on 15/05/2015 - 21:38

      +1 this is the why. When teacher asks to show ur working out this is it.

  • Hirolol on 15/05/2015 - 00:40

    Can you update post when you find out
    Cheers

    • knk on 15/05/2015 - 10:06

      Will do mate.

  • pitufon on 15/05/2015 - 09:03
    +1

    If you only work 42.5 hours a week working in IT consider yourself lucky.

    • knk on 15/05/2015 - 10:07

      Personally, I find the hours excessive. The work life balance would be a lot better if I were to start later or leave earlier.

      That said I don't complain as it is part of the job.

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