Paying employees above award wages:
There is a common misconception by employers that paying employees a salary or a rate which is above the minimum award rate circumvents the need for a written employment contract or to pay any additional overtime, allowances, penalties etc., however, this is not correct.
If employees are covered by an award, even if they are paid a wage which is above the award rate, the clauses relating to allowances, penalties etc. still apply unless they have been specifically set off. In other words, if employers offer award covered employees a “salary” or above award rate, they must have an employment contract with a carefully drafted set off clause (setting off the award component against the award entitlements).
Failure to do this could result in the employer being required to pay the allowances, penalties etc. on top of the above award amount (plus potential penalties for breaching the award) because there was no clear written agreement to the contrary.