Reminder about Fair Work Ombudsman changes to Commission only employment requirements - Real estate industry bulletin 207

This publication is for: 
Property industry

14 October 2019

Reminder about Fair Work Ombudsman changes to Commission only employees - now in effect
 
Western Australian workers who are employed by a constitutional corporation are impacted by a number of recent changes to their pay and entitlements.
 
  • trading or financial corporations, which include many businesses with a ‘Pty Ltd’ or ‘Ltd’ in their name e.g. Smith Pty Ltd trading as Home Real Estate; and
  • incorporated associations and other not-for-profit organisations that are trading or financial corporations.
These changes do not apply to businesses (and their employees) that are:
  • sole traders e.g. Jane Smith trading as Home Real Estate;
  • unincorporated partnerships e.g. Jane and Bob Smith trading as Home Real Estate;
  • unincorporated trust arrangements e.g. Jane and Bob Smith as trustees for Home Real Estate; and
  • incorporated associations and other not-for-profit organisations that are not trading or financial corporation.
Employees who are unsure of their employer's business entity can contact Wageline on 1300 655 266 for further information.
 

Who is covered under the Real Estate Award? 

The award covers:
  • employers and their employees in the real estate industry who fit within the classification of the award, including property sales associates, representatives and supervisors; 
  • property management associates, representatives and supervisors; and 
  • strata / community title management associates, representatives and supervisors.
Review the award for more details. 
 

Commission only employment requirements

The Fair Work Commission introduced changes to the Real Estate Industry Award 2010 (the award) in April this year. A number of changes were made to the minimum employment conditions for commission only employees. To be eligible for commission only employment, employees need to:
  • be a Real Estate Employee Level 2 or above; and
  • have worked in property sales or commercial, industrial or retail leasing as a real estate employee level 2, or as a licensed real estate agent for at least 12 consecutive months over the previous 3 years.
In addition to the above:
  • employees who were employed on the above basis before 2 April 2018, need to meet the new minimum income threshold amount rules; or 
  • if the employee was already engaged before 2 April 2018 with the above conditions, they can continue their commission only arrangement, providing their arrangement is reviewed each year and meets the new minimum income threshold amount rules.

New minimum income threshold amount rules

Employees engaged on a commission only basis must, in any single 12 month period over the past 3 years, have been paid an annual amount (including commission or bonus payments) at least equal to:
  • the minimum annual rate for their classification under the award
  • an extra 25%.
This amount does not include superannuation payments. 
 

Minimum threshold review period now in effect 

Commission only arrangements need to be reviewed every 12 months and need to meet the new minimum income threshold amount rules. In particular, employees engaged on a commission only basis:
  • before 2 April 2018 – should have had their arrangement reviewed by 2 April 2019
  • on or after 2 April 2018 – need to have their arrangement reviewed no later than 12 months after the arrangement started. 
Employees engaged on a commission only basis before 2 April 2019 will therefore have to show they earned the minimum income threshold amount for the previous 12 months.  
 
There were a number of other changes introduced into the award by the Fair Work Commission, including classifications regarding weekly wages, payments on termination of employment, and annual leave for commission only employees. 
 

Pay and entitlements less than the award?

Employees must be paid the award pay rates and entitlements. Use the award rates and pay calculator to determine where your pay and entitlements fall within the award. 
 
If your pay rates are less than the award, contact the Fair Work Ombudsman or visit their Help resolving workplace issues webpage.
 
 
Consumer Protection
Bulletin
Last updated 17 Oct 2019
First published 14 Oct 2019

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