Horticulture Award rates explained - part 2
In part 1, I talked about workers under the Horticulture Award who are paid hourly. Here, I’ll turn the attention to piece rates. This is where the worker is paid for each piece they worked on e.g. number of crates picked, or trees pruned. We often ask growers and packers if they pay piece rate and are met with “no, it’s illegal”. Since the minimum wage floor was introduced in 2022, if you don’t record time and task adequately then you can’t pay piece rates and remain within the rules, but it’s definitely still doable. That said, you’d be game to try without good software tools to help. Read on for the award interpretation for pieceworkers.
Casual workers
As I did for hourly pay, I’ll use Level 1 adult rates as an example. Let’s consider casual workers first, as most piece workers are seasonal and/or contractors. A pieceworkers pay is calculated by number of pieces multiplied by the piece rate. But what about the minimum hourly rate?
Indeed. You need to know how many hours a pieceworker worked in a day. Then you can work out the minimum you need to pay for the day by multiplying the number of hours by the worker’s minimum required rate for the day. Next, you need to check that what they earned on piece rate is at least as much as what they would earn on the minimum hourly rate. If there is a shortfall, you need to pay a ‘top-up’.
For example, Cyril worked for 7.5 hours today. His piecework record says he will be paid $4.50 per bag of avocados he picks. It also says his minimum rate of pay is $29.33 per hour. Today he picked 46 bags, so his earned hourly rate was $4.50 x 46 = $207. The minimum wage guarantee means he must earn at least $219.98 ($29.33 x 7.5 hours = $219.98). He must receive a top-up payment of $12.98 ($219.98 – $207 = $12.98).
If Carlos had filled enough bags that his earned hourly rate was greater than $219.98 for the day, he gets the higher amount. You don’t want to be calculating this manually for every worker every day. Strap in, because there’s more!
Competent workers
The legislation states that Employers have to set a piece rate at an amount so that a pieceworker, working at the ‘average productivity of a pieceworker competent at the piecework task’, will earn at least 15% more per hour than the minimum hourly rate for the pieceworker’s classification level. So that’s $33.73 for level 1 casuals ($29.33 x 1.15 = $33.73 as the 15% calculation is done on top of the casual loading). Say what?
Firstly, what does it means to be competent at the piecework task? That is a pieceworker who has at least 76 hours’ experience performing the task. So, you’ll need to keep track of who is classed as competent.
Next you need to work out the average productivity of a pieceworker competent at the piecework task. Exhausted yet? You will be if you don’t have software that can do this for you with a few clicks. ABCgrower’s Competent Worker Analysis report will calculate all this for you. It will show you who is liable for a top up to minimum wage, and who should be earning at least 15% more, and whether they are or not.
Furthermore, you can use the report to rank workers by productivity to see where you need to take action. You can also get pretty savvy by using the information at hand to fine tune future piece rates. No wonder horticulturists think piece rate is illegal! It’s not illegal but it’s definitely complicated.
Permanent workers
The same rules apply if you pay permanent workers piece rate. They’re just not subject to the casual loading.
Mixed rates
Don’t worry, this isn’t another type of rate, but it’s worth mentioning that you can pay a mixture of piece rates and hourly rates. For example, you pay pruning by piece and training by the hour. Or you pay picking by the hour at the start of the season when the produce is sparse, and by the piece during the peak of harvest. Does it add to the complexity? Yes and no. Not when you’ve got the right tools to take care of the calculations.
At ABC Software, we have clients who only pay piece rate, others who only pay hourly, and others who do a mixture of both. By entering their records directly into ABCgrower’s website or off-line app, smart growers use their own information to find the best solution for their business.