Latest news Pay awards rise poor leaders a burden firms get tough on salaries

RISE FOR LEGAL SERVICES AWARD MINIMUM RATES

The Fair Work Commission announced in June a 3 per cent increase to the award minimum wages. This means that the minimum rates in the Legal Services Award have increased. Please click on the PDF link (at top right of screen) for the Minimum Salary Rates tables, which are a summary of the LSA increases by hour and by week for each role classification. These tables also include the minimum annual salaries, including leave loading and the higher 9.5 per cent superannuation, for each role for a 38, 37.5, 36.25 and 35-hour working week.

The casual hourly rates, including the 25 per cent, loading are provided. The minimum rate of pay for non-award staff is also included. As an example, the minimum weekly pay rate for law graduates undertaking a traineeship is now $861.30 for a 38-hour working week. As a salary, this is an annual minimum of $49,645.33 (including the required payment for leave loading and 9.5 per cent superannuation). If an employee who is being paid the minimum works longer hours, the employer is required to pay overtime.

The new pay rates take effect from the first pay on or after July 1, 2014. Legal sector employers must ensure that they have classified each employee’s role correctly and that they are paying at least the minimum wage for this classification. The classification descriptors for each level are included in Schedule B of the LSA. Click here for the link to the Legal Services Award on the Fair Work Commission website.

Junior employees (20 years of age or younger)
Junior employees must be paid a minimum wage based on a percentage of the applicable adult wage rate. Again, the role they are undertaking must be classified correctly and the minimum rate calculated using the below table. For example, a 19-year-old undertaking a secretarial role classified at Level 3 for a 38-hour week needs to be paid a minimum weekly base rate of 80 per cent of $788.16, which equals $630.53. Leave loading and superannuation must be paid in addition to this.

Age and % of applicable adult wage rate
Under 16 years – 45%
16 years – 50%
17 years – 60%
18 years – 70%
19 years – 80%
20 years – 90%

(Source: Information summarised by Kriss Will, Kriss Will Consulting Pty Ltd)

PAYING OUT ON BAD LEADERS
Poor leadership is the dominant factor that negatively affects individual performance, according to specialist recruitment consultancy Robert Walters. In a white paper, entitled Developing High-Performing Teams to Drive Business Performance and Engagement, more than 250 hiring managers and almost 700 professionals across Australia and New Zealand commented on the factors that help build high-performing teams. Thirty-two per cent of professionals indicated that ‘poor leadership’ was the main factor that had a negative impact on their performance. Other significant bugbears included not having clearly defined goals and objectives, and not being adequately recognised for high performance. The white paper also found that 80 per cent of professionals believed poor leadership decreased trust and openness.

Other key findings included:
• organisations could be missing out on top talent due to inflexible selection criteria
• more than half of the respondents felt their organisation did not do enough to reward high performance
• 61 per cent of professionals nominated varied and interesting work as the factor that kept them most engaged in their roles
• 51 per cent of hiring managers indicated that their organisation did not do enough to keep their employees engaged.

FIRMS GET TOUGH ON PAY HIKES
A respected salary survey suggests law firms are reluctant to offer generous pay increases this year. The ALPMA Australasian Legal Industry Salary and HR Issues Survey Report 2014 shows that salaries for lawyers are levelling out as firms tighten control of payrolls. It indicates that fewer firms are increasing pay above the rate of the consumer price index, with about 33 per cent of firms planning pay hikes above CPI this year – down 15 per cent on last year. About 40 per cent expect to pay only the CPI rate.

With 230 firms completing the survey, 4.5 per cent expect a total wage freeze at their firm, while 22 per cent are planning partial wage freezes. The ALPMA survey also reveals that Western Australia still has the highest-paid lawyers in the country, although the majority of well-paid positions are in New South Wales. Overall demand for lawyers has remained steady in recent few years, with 80 per cent of firms likely to hire over the next 12 months, according to the survey.