Managing people

Changing pay periods

Employers may sometimes need to change the pay periods applicable to their employees. Here are some simple points to note.

For a variety of reasons (including easier administration) employers sometimes wish to change the pay periods applicable to their employees.

Paying employees more frequently may improve the employee experience, whereas reducing the frequency of payments may save precious time on administrative tasks, or help to ease the strain on the company’s cash flow.

Whatever the reason, there are some simple points to note when it comes to changing pay periods.

Australian pay periods

In most cases, the source of an employer’s obligation with respect to the time and method of payment of wages is usually determined by the applicable modern award.

For example, in the Clerks - Private Sector Award 2020, “the employer may determine the pay period of employees as being either weekly or fortnightly.” Additionally, “the employer and an individual employee, or the majority of employees, may agree to monthly pay periods.”

In cases where the employee is not covered by an award, you can also check the relevant enterprise agreement or registered agreement. Failing that, the Fair Work Act stipulates that employees must be paid “at least monthly”. 

Changing pay periods in Australia

An employer does not need permission from their employees to make a change.

However, employers must offer a reasonable pay period change notice. Ideally, this will allow time for employees to raise any concerns with HR ahead of the change.

As a rule of thumb, a month’s notice would usually be regarded as sufficient notice in most circumstances.

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