Q&A: Pay for WA employees

All employees should be paid for their work. If an employer is not paying an employee, it’s likely that the employer is breaking the law.

However, not all workers are “employees” and some types of workers don’t have the right to be paid.  There are only limited exceptions where an employer does not have to pay someone for doing work for them. Examples of valid unpaid workers are volunteers, work experience placements and unpaid interns.

However, it is not always clear whether someone is an employee, or an unpaid worker. Sometimes, a person who believes they are an unpaid worker may actually be an employee. This means that you may be told that you’re an unpaid worker but you are actually an employee who is entitled to pay.

Internships

Normally, an internship should be related to an approved course of study or other formal arrangement where the intern gets some kind of benefit (primarily experience and development, but also things like course credit) instead of pay.

Volunteer workers

Volunteers can agree to provide unpaid work, but it should be clear that the parties intended for the arrangement, and the volunteer should not be doing tasks that an employee would ordinarily do.

Whether the parties intended for the arrangement to be an employment contract depends on the objectively ascertainable expectations that each party held when they entered into the arrangement. If the parties expected to be able to require each other to perform obligations under the contract, then that may be indicative of a contract. If the organisation that the person is working for expected to exercise a high degree of control over the person, such as requiring them to attend at particular hours, and/or controlling and directing the way they do their tasks, then that may be indicative of an employment contract.

Whether or not a volunteer is in a role or doing tasks that an employee would ordinarily do depends on context. It will usually be relevant to consider things like the organisation or purpose that the person is volunteering for, or the tasks that that they are doing. If the organisation is one that is usually entirely voluntary and does not conduct activities that generate an income, then that may weigh in favour of the person being a volunteer. If it is a for profit enterprise and its workers are not usually volunteers, then that may weigh in favour of the person being an employee.

Trial workers

Sometimes jobs will require a potential employee to demonstrate that they have the relevant know-how to do the job they’re applying for. This can be done through a trial, sometimes called a work trial.

A trial can be unpaid or paid. A trial should only be unpaid when there is a genuine need to evaluate the capacity of a potential employee to do the job, there is someone watching the potential employee work and evaluating their performance, and the trial only goes for as long as is necessary to perform the evaluation – usually only a day, shift, or up to a few hours.

If an unpaid trial goes for longer than is necessary, or there is no one watching the worker perform their tasks, or the nature of the work means that there are no particular skills that need to be evaluated, then the trial period may actually be a period of probationary employment. Probationary employment is employment and should be paid.

Conclusion

Whether a worker is an employee depends on the specific circumstances of their work, such as what was agreed to, the primary reason for the arrangement, the length of the arrangement, the kind of work being done, and which party is getting more out of the arrangement. Each situation is unique, so ultimately it will be a case of making an argument why you should be considered an employee instead of an unpaid worker.

If you are a casual worker, you should be paid for every hour that you are required to work.

If you are not a casual worker, you may be paid by the hour, or you may be paid according to a salary. If you are a salaried worker, your annual salary may include some overtime in addition to your usual hours.

You can also sometimes be paid a commuted allowance where, instead of earning penalties and allowances as you go, a set allowance is incorporated into your annual salary. This usually occurs in jobs that regularly involve working at night or on weekends, or other work that would ordinarily attract an allowance or penalty.

Set off clauses are similar to commuted allowances but can cover a broader range of entitlements than just allowances or penalties.

Set off clauses can be included in a contract, or an award or agreement.

If your salary includes some overtime, then you may not be entitled to additional pay if you work extra hours.

In both the state and national systems of employment law, there is a minimum wage that applies to all employees.

Sitting above the state or national minimum wage are industry and occupation specific minimums set by awards and agreements. Awards and agreements are legally enforceable industrial “instruments” or documents registered with an industrial commission that set mandatory entitlements or conditions that employees are entitled to including rates of pay.

Awards and agreements have different minimum rates of pay depending on the kind of work the employee performs, their level of experience and seniority, and other factors.

Your pay cannot go below a minimum wage that applies to you. For this reason, it is important for you to know what your minimum wage is. When you’re starting a new job, you should:

1. Figure out whether an award or agreement applies to your new job;
2. If an award or agreement applies, figure out which rate of pay in the award or agreement best matches your position or the work you do;
   • If an award or agreement doesn’t apply, the state or national minimum wage applies to your employment; and
3. Check the pay you’ve been offered to see whether it is at least the same as the minimum wage.

Employers may also offer employees rates above the minimum rates of pay in their contracts. If a contract doesn’t mention pay, then it will usually be the case that your pay entitlement comes from an award or agreement that applies to your employment. If there is none, then the legislative minimum will usually apply.

All of this means that, although your level of pay may be able to negotiated, there are minimum rates of pay that it can’t go below. You should find out the minimum rate that applies to you by contacting a third party like the Fair Work Ombudsman (for national awards and agreements) or Wageline (for state awards and agreements).

There are services whose purpose is to help employees figure out which rate of pay applies to them. Wageline, a service provided by the WA Department of Mines, Industry Regulation and Safety, helps state employees.

The Fair Work Ombudsman helps national employees. They should be able to tell you whether you’re a state or national system employee, whether an award or agreement applies, what rate of pay under the instrument is the right one for you, and what the state or national minimum wage is.

You can call Wageline on 1300 655 266 and the Fair Work Ombudsman on 13 13 94.

I’m on a salary, does this change anything?

You can’t contract out of the minimum hourly rates set by an award that covers you. However, if you are on a salary then you may be required to work additional hours without pay, and you might not be entitled to overtime rates or other types of penalty rates in an applicable award.

This is because your salary entitles you to pay that works out higher than the minimum hourly rate, so the additional hours and penalty rates are “absorbed” or “set-off” by the higher salary. Your employer can only set-off extra hours and other entitlements if they have a lawful salary arrangement. There are a few ways that this can occur. If you are unsure you may want to seek legal advice.

Generally, no. The minimum wage is considered a “safety net” wage that can’t be reduced, even by agreement. It is unlawful for an employer to pay less than the minimum wage that applies to an employee, even if the employee agrees.

However, there are some minor exceptions to the minimum wage.

Workers who are assessed as having less productive capacity because of a disability or impairment may be able to be paid less than the minimum wage under the Commonwealth Government Supported Wage System. This requires the person to be covered by a Supported Wage System provision in an industrial or enterprise agreement, and to be assessed by a Supported Wage System assessor as having reduced capacity.

It is important to note that an employer cannot decide to pay an employee less than the minimum wage simply because they have a disability. Having a disability does not automatically make a person less productive, and in some cases an employer may be obliged to make accommodations for an employee with a disability to enable them to work. Failure to do so may be unlawful under anti-discrimination law. For more information, see our publication Q&A: Workplace discrimination for WA workers

Apprentices, trainees and workers under the age of 21 can also be paid less than the national minimum wage for workers 21 and over.

No.

It is against the law for an employer to pay an employee with anything other than money. This means that an employer cannot give you merchandise, meals or anything else instead of money as a form of pay.

Sometimes an employer can offer a salary “package”. This means that the value of the overall salary package may be a certain number, which is made up of a combination of money and something else, like a car, superannuation contributions, or fees and expenses. These kinds of arrangements may come about by the employee agreeing to a lesser salary in exchange for receiving something else, or they may be salary sacrificing arrangements where your salary remains the same, but deductions are made from your salary to be paid to a third party who delivers another benefit under the salary package

Pay is required by law to be at least monthly, if not more frequently.

There are requirements under state and national laws for employers to keep extensive records of their employees’ employment, including their pay. Employees and other people acting on the employee’s behalf can request access to these records, and the employer must provide access and allow them to be inspected.

Your payslips are required by law to contain information about your pay and your employment, including:

• Your name and the name of your employer;
• Your employer’s ABN;
• The pay period and the date of payment;
• Your rate of pay, hours of work, and total dollar amount of pay;
• Any loadings, penalties, bonuses or other pay above your ordinary salary; and
• Any deductions and superannuation contributions.

Employers are also required to provide pay slips to employees. Pay slips contain some information about pay, as well as other important information about their employment, like their leave balances, and the legal name and ABN of the entity that employs them. Pay slips must be provided to employees within one working day of paying the employee for their work.

Generally, no.

There are very limited circumstances where an employer can make deductions from an employee’s pay. Usually, the deduction has to be agreed between the employee and the employer in writing, and it has to be for the benefit of the employee. Even in cases where the employee agrees in writing to the deduction, if it is not for their benefit, it may still be unlawful.

Examples of deductions that can be agreed and are for the employee’s benefit are things like deductions to pay union dues, or deductions under a salary packaging arrangement, or minor deductions to go towards a social club fund.

There may be circumstances allowed under an award where deductions can be made from an employee’s pay. A common one is where an employee fails to give the required notice for their resignation, an employer is sometimes authorised under an award to deduct a limited amount of money from their final pay.

The rules around deductions from pay are pretty strict – so if your employer is taking money out of your pay and it doesn’t feel right – you may want to seek further information and advice.

It depends. Generally speaking, minimum wages can’t be contracted out of. This means that even if you agree to be paid on a commission basis, you must end up at least as well off as you would have been had you been paid the relevant minimum wage. If your commission leaves you worse off, your employer will be liable to make up the difference.

Some industries, such as real estate, allow for some employees to be paid on a commission-only basis in limited circumstances. Those employees forego a number of conditions, including the minimum weekly or hourly wage specified in the Real Estate Industry Award (for national system employees).

Most awards and agreements contain some allowances, penalties, and other loadings or additional payments that employees are entitled to in certain circumstances. These can be very different depending on the industry or employer the award or agreement covers. There can be wet weather allowances for workers who work outside, travel and camping allowances for workers working in remote or regional areas, and penalty rates for workers in numerous industries if they work for long periods of time without taking a break.

If you think you should be paid an allowance or penalty for some aspect of your work, you should contact the Fair Work Ombudsman or Wageline to check whether you are entitled to one.

Outside of awards and agreements, there are few entitlements to additional pay. A common one is casual loading, which is an additional pay of 20% of the base rate of pay under state law and 25% of the base rate under national law.

Under the Fair Work Act, employers can stand down national system employees in limited circumstances, namely when employees are taking industrial action, or when work stops for a reason that the employer is not responsible for. When employees are lawfully stood down, they are not entitled to pay.

Contracts, awards and agreements may allow employees to be stood down without pay in certain circumstances. Beyond such circumstances, there is no general ability for an employer to stand an employee down without pay.

Sometimes employers may attempt to stand employees down or suspend them for specific reasons, such as if the employee is being investigated for misconduct or they are being assessed for fitness for work. In both cases, there may be a reasonable basis for doing so, such as preventing a health and safety risk or protecting the employer’s legitimate business interests. However, simply having a reasonable reason for standing the employee down without pay does not entitle the employer to do so, and may make them liable for a claim for breach of contract. Often, an employer will safeguard themselves against such a claim by maintaining the salary of the employee while they are away from work.

Technically speaking, failure to pay an employee in full, in money, at least monthly, is a breach of the Fair Work Act. If your employer has breached the Fair Work Act by failing to pay you, you may be able to make a claim to a court to recover the money and seek a penalty.

If your employer has only gotten a few payments wrong and has rectified them in a timely manner, it may be heavy handed to take them to court, especially if you are still working for them. Instead, it may be a better idea to inform them that you think your pay is wrong, and give them an opportunity to fix the issue and pay what you are owed.

If your employer regularly gets your pay wrong, or if you are at risk of financial hardship for their failure to pay on time, you could let them know that you are aware that failure to pay employees correctly is unlawful and puts them at risk of liability for penalties.

If they continue to make mistakes, and you are owed wages but they are not paying, you could consider taking legal action at that point. However, you should be aware that it could damage the employment relationship.

Generally, you are required to pay back any money you have been overpaid by your employer. The general limitation period is 6 years, so your employer could have up to 6 years to claim any overpayment back from you.

Where the overpayment has occurred because of a genuine mistake on the part of the employer, you will likely need to pay your employer back as it would be unfair for you to benefit from the mistake – this is based in the legal principle of unjust enrichment.

Your employer is generally not permitted to deduct overpayment from your subsequent wage payments to recover the overpayment. Whether your employer can deduct from your pay for overpayment will depend on any award, agreement, or contract covering your employment. You will likely need to arrange a payment plan to repay your employer in reasonable installments. A written agreement should be made setting up the reason for the overpayment, the amount overpaid, and how repayment will be made.

If you have been overpaid it is likely a good idea to discuss this with your employer so an acceptable solution can be reached, as your employer may be able to pursue you for the overpaid amount.

You can seek to enforce your entitlement to unpaid wages by writing a letter of demand to your employer. If this is ignored, you can make a claim in the Industrial Magistrates Court for the amount owing, if your entitlement to the unpaid wages stems from the national employment standards in the Fair Work Act, minimum conditions of employment, or from an award or industrial agreement.

You could alternatively seek to enforce your contractual entitlement to the wages by making a breach of contract claim in the Magistrates Court or a denial of contractual benefits claim in the Western Australian Industrial Relations Commission.

For further information about making these claims, please see our claim guides below:

Claim Guide: Breach of contract for WA employees

Claim Guide: Denial of contractual benefits for WA employees

Claim Guide: Unpaid minimum entitlements for WA employees

If you are a national system employee, your employer generally cannot prevent you from talking about or revealing your pay and conditions.

Employers may include pay secrecy clauses in employment contracts. If you entered into an employment contract prior to 7 December 2022, which contains one of these clauses, you may be prevented from discussing or revealing your pay and conditions.

If you entered into a contract with a pay secrecy clause after 7 December 2022, this clause has no effect.

If you are uncertain about whether you are a State or National System employee, see our publication Q&A: State and National System Employees

Q&A: Minimum Conditions for WA Employees

Claim Guide: Breach of contract for WA employees

Claim Guide: Denial of contractual benefits for WA employees

Claim Guide: Unpaid minimum entitlements for WA employees

Regulators

Fair Work Ombudsman

Wageline

Wageline has a number of video resources to assist state system employees identify their correct rate of pay and understanding state system awards. They can be viewed here.

Commissions

Fair Work Commission

Western Australian Industrial Relations Commission