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High Income Threshold to Rise

The Fair Work Commission has determined that the High Income Threshold will increase to $133,000 from 1 July 2014.

The relevance of the threshold is that employees who have annual guaranteed earnings above the threshold are not able to bring claims for unfair dismissal. The Commission has no power to award compensation to or to reinstate high income employees unless the employee is covered by a modern award or an enterprise agreement. It is rare for such employees to be covered by those instruments.

Employers should be careful not to assume that all payments made to employees count toward the threshold. Assessing whether an employee is above or below the threshold is not simply a matter of looking at the figure on their pay slip. You need to consider a number of factors including wages, the value of non-monetary benefits (such as extra superannuation) and amounts dealt with on the employee’s behalf (such as a salary sacrifice arrangement). Components which are not included are amounts which cannot be determined in advance (for example, a bonus) or allowances paid to employees that are not used on work-related expenses.

Employers can also be caught out by thinking that the seniority of employees automatically excludes them from the unfair

If you need advice on your workplace rights, either as an employer or as an employee, please contact FWO’s employment lawyer Jay Clowes on (02) 6650 7016.

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