How is BOOT  testing different from Annualised Salary requirements?

This is a common asked question when we are talking to businesses about our wage compliance services. 

Wage compliance is not always about the rate of pay we use to remunerate our employees. The concept of Better Off Overall Testing (BOOT)  is not new but the introduction of Annualised Salary arrangements is relatively recent.

A BOOT test involves assessing an agreement to ensure that the terms within that agreement provide better entitlements than the relevant award.  An employer may decide to pay their employees a rate of pay that is in excess of that required under the award. Some terms within the award may be incorporated within the rate of pay and not calculated separately.

A BOOT test may involve the employer testing to ensure that the employee is better off with the terms of the agreement, that may include a higher rate of pay, than the terms of the relevant award which uses a lower rate of pay and the payment of additional entitlements.

An Annualised Salary Arrangement is one where the employer agrees to pay their employees an annual salary which is greater than the minimum wage under the award.

Annualised Salary requirements seek to ensure that employers keep appropriate records for employees and regularly check that an employee has been paid in accordance with the arrangement.

The most common areas to be included and monitored in these arrangements are:

  • Total hours worked including start and finish times
  • Recording of paid and unpaid breaks
  • Regular checks per pay period of outer limits to be applied and payment of excess if required
  • Annual reconciliations to ensure the employee has been paid in excess of the minimum under the award

The Fair Work Commission regularly reviews and updates Modern Awards with new rules for Annualised Salary Arrangements.

If you need help navigating the complex requirements for BOOT Testing or an Annualised Salary arrangement we can help make an appointment today by clicking the button below.