Equal Remuneration Project

Equal Remuneration Supplementation Fact SheetWhat is the Equal Remuneration Supplementation?

The purpose of this document is to explain the Equal Remuneration Order (ERO) supplementation and to provide advice to organisations about some of the points they need to consider when calculating salary increases for the Social and Community Services (SACS) employees

When the ERO was announced by Fair Work Australia, the State Government made a commitment to provide supplementation to organisations receiving funding for service provision through the Department of Health and Human Services. This supplementation is a contribution towards the salary increases that organisations will need to pass onto their SACS employees.

The Tasmanian Government has made a commitment to provide an additional $3 million per annum for the ERO increase until 2015-16. State Treasury will now be reviewing the supplementation funding that has been made available, in light of the information obtained through the Salary Census.

The Commonwealth Government has committed to providing supplementation on the funding they provide to the Tasmanian Government through National and Partnership Agreements. This funding is for the Housing, Homelessness and Disability sectors, with a small amount for Mental Health Reform, and will be applied to those programs.

Salary Census and benchmarking

To assist the State Government in allocating the funding that has been made available for supplementation, a Community Sector Salary Census was conducted. This allowed the Department to understand the classification of employees within organisations, the amount of funding that goes towards the SACS Award payments, and importantly the organisations that will not be affected by this historic decision.

From the Census information, a benchmarked increase has been developed to assist organisations with ERO salary funding. The benchmark has been derived through a lengthy process which involved understanding the situation in each organisation, grouping together “like” services, and developing a

percentage increase that would be a fair amount for the average service structure. For further information see the ERO Benchmarking Process Fact Sheet.

The Department will use the benchmarked increases as the basis for providing supplementation in the 2012-13 financial year. However, since it is clear from that analysis that there are some service models that are very different from other like services in their program area, and since the Department understands that there may be issues with the data provided in a small number of the Salary Census responses, there are a small number of adjustments that will be made to the benchmarked increases to better align the 2012-13 supplementation with the actual situation in organisations.

31 October 2012

The Tasmanian Government is providing supplementation to assist organisations with implementing the ERO. This is not an exact amount based on your individual situation.

It is vital that organisations understand that 2012-13 of the ERO increase is only a part year effect. Current allocations from State

and Commonwealth Governments have enabled us to fully fund the benchmarked increases, and the slight adjustments for

some organisations in 2012-13.

The review process

A review process will commence when you receive these letters until the end of February 2013. This process will allow organisations to query the increase they are receiving if they believe it is significantly different to their actual situation.

The organisation will be asked to provide additional or corrected information in the form of the Salary Census to justify any significant changes to their supplementation requirements. This may lead to a revalidation of a benchmarked increase.

After this review process is completed, and the benchmarking has been revalidated with any revised information, organisations will be provided with details on the actual supplementation rates for their service types. This will provide organisations with an indication of their likely future supplementation levels. The Department aims to provide this advice in March 2013, but that depends on the amount of change generated in the review process.

It is not an exact payment

The supplementation is not an exact payment of the increase that organisations might require for their individual staffing levels. It is a percentage increase that has been applied to your existing funding that will contribute towards the SACS salary increases for your DHHS funded services. This means that you may be receiving slightly more or slightly less than your Salary Census calculated requirement.

If you believe that you are receiving significantly more or less than you require, please contact the Department for a review. The Department defines

“significantly” as a supplementation amount that is greater than 10 per cent or $1 000 different than your organisation requires. Organisations will be required to present evidence showing how their situation differs from the Salary Census data provided, and the reason for the discrepancy.

It is not based on non-Award rates

The supplementation is not based on your non-Award salaries, it is based on the component of your salaries that are at the Social, Community, Home Care and Disability Services Industry (SCHADS) Modern Award or Community Services Award (NAPSA) rates.

The Salary Census was designed to enable us to calculate the Award rates as a separate figure from your actual budgets. For example, if an organisation pays all of their SACS Level 3 employees at 5 per cent above the SCHADS Modern Award, and the Budgeted salaries and on-costs in the Salary Census equalled $242 000, then the Award component is $230 250. This means that the 2.89 per cent increase of the ERO is only applied to that amount, and not the full budget for the organisation.

So whilst your organisation’s actual ERO increase may be X thousand dollars, the Award component of that would only be Y thousand dollars, which is the figure used to develop supplementation.

Things to remember

Organisations need to be aware that their base Award will impact the ERO increase that their staff will receive. The percentage increases outlined in the ERO only apply to people employed under the SACS Modern Award, those people employed under the CSA NAPSA transitional award will generally receive a lower percentage increase.

All supplementation is based on the Award component of your SACS salary related

budget – above-Award rates have not been

included.

If you are paid under the CSA NAPSA and are a SACS Level 4 employee, or above, your rate of increase will generally be lower than the ERO percentage increase, because your current rates of pay are higher (there are three pay points that are exceptions to this).

Organisations need to ensure that they are using the appropriate percentage increases for their staff when calculating their employees’ salaries; otherwise they may be overpaying staff. The Department recommends using the Jobs Australia pay tables to understand the Award salaries that your organisation will be required to pay SACS employees.

Contact details

To request further information about the process, or to request a review for your organisation, please contact the Department on dhcs@dhhs.tas.gov.au.

If you require further information about the implications of the ERO for your organisation in general, or rates of pay that you should be using, please contact your Peak Body or an industrial relations expert, if you have one.

Under the SCHADS Modern Award, a SACS

Level 4 pay point 1 employee receives

$22.32 an hour whereas a CSA NAPSA employee

at the same level receives $23.51 an hour.