Horticulture Award rates explained - part 1
As providers of award interpretation software, we’re often asked questions about pay calculations – and these questions often come from organisations already doing the right thing…or at least trying to do the right thing – it’s complicated! Employees of growers and packers fall under the Horticulture Award. Here, I’ll talk about work that is paid hourly.
Permanent workers
I’ll use the level 1 adult rates as an example throughout. For permanent workers – that’s full-time and part-time employees, the minimum hourly rate is $23.46. This is the rate for ordinary hours. Time and a half is $23.46 x 1.5 = $35.19, and double time is $23.46 x 2 = $46.92. So far, so good.
But how do you know when to apply which rate? First you need to record the start and finish times of your workers and calculate the hours worked. Then you need to know the rules, and apply them to your records. A laborious task which can be difficult to get right without tools to help.
When you record worker time and task in a program like ABCgrower it will do the calculations for you. For example, it will check that the ordinary hours of work for your permanent employees have not exceeded 152 hours over a four-week period. For a worker with hours in excess you assign those hours as overtime, as required by the award.
Allowances
What if some of your workers are entitled to a first aid or leading hand allowance? These allowances are an extra amount per hour. In ABCgrower, you simply add then to a worker’s minimum hourly rate setting, e.g. First aid allowance = $23.46 + $0.32 = $23.78, and everything will be calculated correctly from there.
Casual workers
This is where it gets trickier. Most are aware the hourly rate is $29.33 (as of 1st July 2024). This is made up of the minimum hourly rate of $23.46 plus 25% casual loading i.e. $23.46 x 1.25 = $29.33.
The ‘half’ part of time and a half, is half the base rate i.e. $23.46 x 0.5. This is added to the casual rate, so all up it’s ($23.46 x 1.25) + ($23.46 x 0.5) = $41.06. Similarly with double time, it’s ($23.46 x 1.25) + ($23.46 x 1) = $52.79.
Workers in ABCgrower are set as casual or permanent, and the rules are applied accordingly. For example, the ordinary hours of work for casual employees other than shift workers will not exceed 304 ordinary hours over an eight-week period.
Allowances are managed in the same way for casuals as they are for permanents, as the casual loading is applied to the allowances also.
Managing worker’s pay rates
Correct rates are one thing, but how do you manage the various rates of all your workers? Without the right tools, it’s getting even more complicated. ABCgrower has several ways to manage this with ease, including setting and applying pay grades. You can set up pay grades for the various award rates, and set the appropriate grade for each worker. When the rates increase, as they invariably do each year, set the new rates and they are automatically applied to the workers.
If you pay more than the minimum required rate, the system will calculate overtime rates at your rate, or at the minimum rate, as is your preference.
So, while the rules and regulations are complicated, being compliant doesn’t have to be, so long as you have the right tools. Look out for part 2 where I look at paying piece rate (spoiler alert, it is still legal!).