Modern Awards Explained: How to Find the Right Award and Pay Rates
- anytimeassist
- 6 days ago
- 3 min read
Updated: 3 days ago
Modern Awards play a major role in setting minimum pay rates and conditions for employees, but they’re often one of the most confusing parts of employing staff. Understanding how awards work, which one applies to your business, and how classifications affect pay can help you stay compliant and avoid costly mistakes.
What are Modern Awards?
A Modern Award is a legal document that sets minimum pay rates and employment conditions.
An award applies based on:
the industry your business operates in, and
the type of work an employee performs
Every award includes information about who it covers. If an employee is covered by a Modern Award, their entitlements come from that award in addition to the National Employment Standards (NES).
Modern Awards do not apply if an enterprise agreement is in place.
What’s Included in a Modern Award?
Each Modern Award contains rules for a specific industry or occupation. These rules typically cover:
minimum pay rates
penalty rates and allowances
hours of work
breaks
rosters
overtime
If an employee is covered by an award, these conditions must be met at a minimum, regardless of what is written in their employment contract.
What are Award Classifications?
Award classifications (sometimes called levels or grades) describe different roles within an award. They are usually found towards the end of the award, often in a schedule.
Classifications are based on factors such as:
the duties performed
whether the employee supervises others
required skills, experience, or qualifications
An employee’s classification determines their minimum pay rate. It’s important to review classifications regularly, especially if an employee’s role changes, they gain qualifications, or they take on more responsibility.
Award Classifications and Pay Rates
To work out the correct minimum pay rate, you need to know:
which award applies, and
the employee’s correct classification
Classifications can change over time. Employers should review classifications when an employee:
changes duties or role
begins supervising staff
completes an introductory period
gains new qualifications or training
How to work out which award applies
The easiest way to find out the award that applies to your business is to use the PACT (Pay and Conditions Tool), which asks questions via an online form to help determine award coverage and pay rates
The PACT calculator is especially useful as it helps you work out both the applicable award and the correct pay rate, including allowances, based on classification.
Modern Awards, Enterprise Agreements, the NES and Employment Contracts
Modern Awards
Legal documents made by the Fair Work Commission
Set minimum pay rates and employment conditions
Usually apply to specific industries or occupations
Can apply even when a written employment contract is in place
Enterprise Agreements
Agreements that apply to a business or group of businesses
Cover multiple employees
Approved and registered with the Fair Work Commission
Set minimum terms and conditions for employees covered by the agreement
National Employment Standards (NES)
A set of minimum employment entitlements for most employees in Australia
Cover areas such as hours of work, leave, termination, and flexible work arrangements
Form the legal foundation of employee entitlements under the Fair Work Act
Employment Contracts
An agreement between an employer and an individual employee
Sets out the terms and conditions of employment for that role
Can be written or verbal, though written contracts provide greater clarity
Must not provide less than an employee’s minimum legal entitlements
Together, these instruments work as a hierarchy of employee protections. The NES provides the base level of entitlements that apply to most employees. Modern awards or enterprise agreements then add industry- or business-specific minimum conditions. An employment contract sits alongside these and explains how those entitlements apply to an individual employee. While an employer can offer more generous terms in an employment contract, the contract can never reduce or override the minimum entitlements set out in the NES, a modern award, or an enterprise agreement.
Employers Covered by More than One Award
It’s possible for a business to be covered by more than one award, depending on the roles within the business.
For example, a construction business may have:
trade staff covered by a construction award, and
office staff covered by a clerks award
Each employee must be assessed based on the work they perform.
Viewing or downloading Modern Awards
You can access full Modern Awards online through Fair Work government websites. Some sites allow you to download awards, while others allow view-only access.
Awards are regularly updated, and since 2020 many have been rewritten using clearer language and improved pay tables, making it easier to identify the correct rates and conditions.
More Information on Awards
Modern Awards are a key part of employing staff correctly, but working out the right award and classification can feel overwhelming. With the right tools and regular reviews, award compliance becomes much easier to manage.
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