How Wages are Set
Wednesday January 14, 2009
There are three different methods of working out wages, that is, awards, collective agreements, and individual arrangements.
Awards - are legally enforceable determinations made by federal or state industrial tribunals that outline the terms of employment, including wages. Wages set by awards are employees who have their wages set by an award, and who are not paid more than the award rate of wages.
Collective agreements - set the terms of employment, and are usually registered with an industrial tribunal or authority. These are agreements between an employer and group of employees with wages decided upon.
Individual arrangements- made between an employer and an individual employee on the terms of employment for the employee. This includes employees whose wages are set by individual contract and the like such as a common law contract.
Methods of setting wages by jobs categories showed that the highest proportion of employees who had their wages set by a registered or unregistered individual arrangement were management jobs and administrator/office support jobs and Advanced clerical and service workers, at 54% and 49% respectively.
Lower skilled jobs such as Elementary clerical, sales jobs and service workers held the highest rate of awards and collective agreements were most prevalent for Professionals (57%) and Intermediate production and transport workers (47%).
By industry, wages were typically set by collective agreements in government and defence jobs, Electricity, gas and water supply and Education jobs while wages within commercial industries such as Retail were typically awards driven.
These methods provide an excellent way for employees to understand and determine their appropriate wages.