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The two-year anniversary for new piece-rate minimum wage guarantee has come and gone, and we have seen and heard a few different scenarios and impacts the changes have had on growers and workers.
Sure, the workforce and labour shortages are still mentioned in broader industry news, but the reality is that Working Holiday Makers and the PALM scheme combined are meeting the demand of most growers across the country, definitely in the lower-skilled worker space. We do acknowledge gaps remain in sourcing and attracting semi-skilled and experienced/qualified labour to rural and regional locations.
However, for roles that typically attract piece-rates such as picking jobs, there seem to be enough workers available. So, let’s do a quick re-cap on the rules around paying piece-rates.
A piece rate is where an employee gets paid by the ‘piece’. It’s based on the amount the employee has picked, packed, pruned or made. Employees getting piece rates are paid by output. For example, the number of kilograms or bins of produce picked. Importantly, a piece rate is based on individual effort only – not on group effort.
Under the Horticulture Award there:
- is a minimum hourly wage guarantee for each day that pieceworkers work;
- are requirements for setting piece rates; and
- are requirements for using piece rates.
Full-time, part-time and casual employees who are paid a piece rate under the Horticulture Award have a minimum wage guarantee for each day that they work. This means that for each day that they work, a pieceworker has to be paid at least the ‘hourly rate for the pieceworker’, multiplied by the number of hours worked on that day. For casual employees, this includes the 25% casual loading.
If the pieceworker would earn more than the minimum wage guarantee for their day’s work under the piece rate, they have to be paid that higher amount.
With more labour choices currently, we have seen growers and employers be particularly strict on who their teams are made up of, and it’s fair to say that if casual workers are not fast enough, they have been ‘moved on’ fairly quickly. As with any industry, if a worker is no good at their job they are unlikely to keep it. And as a casual worker their job can stop at any time without notice. So, if they are too slow and you don’t think their speed will improve, you can choose not to offer them any more work.
Although farmers now have greater clarity about how piece rates must be calculated, many find the administration of doing so onerous so have chosen to offer only hourly-paid work. But if you go down that path, experienced, productive workers may seek other farms who still offer piece rates in order to earn more.
It is important that potential employees understand which payment method is being offered. If you are offering piecework the rate must be clear, as well as the task the worker must undertake, and what measurement is used. You must provide that information in writing to the worker (electronically is acceptable) before they start on that task. There are other records you must keep as well such as hours worked, even if paying by piecework, and the method by which you arrived at the piecework rate.
As has been the case for a very long time, you must give your workers a written pay slip with their earnings – again, electronically is fine. That pay slip must include the piece rate, the quantity of units picked (or whatever the task was), and the hours worked. The pay slip must also make it clear who the employer is. Whether you are a farmer directly hiring workers or a labour hire contractor supplying workers to a farm, the pay slip must be clear which is the employer. In either case, the piece rate information provided before starting must come from the employer, whether contractor or farmer.
Where to for more information?
Your best bet is to head to the Horticulture Showcase virtual hub on the FairWork website. Here they detail lots more information on pay rates, hourly rates, piece rates under the Horticulture Award and Wine Industry Award, record keeping, tax and superannuation requirements.
