If you’re an employer or an employee in Australia, it’s essential to understand the High-Income Threshold (HIT) as defined by the Fair Work Act 2009. It plays a pivotal role in determining employment conditions and legal protections for high-earning employees.
What is the High-Income Threshold?
The High-Income Threshold ($167,500.00 as of July 1st, 2023) is an annually adjusted figure that marks the income cap above which certain employees may not be entitled to specific protections under the Fair Work Act. It’s calculated based on the employee’s ‘earnings,’ including wages, amounts applied or dealt with on behalf of the employee, and the agreed monetary value of non-monetary benefits.
Why Does the High-Income Threshold Matter?
Employees earning more than the High-Income Threshold who are not covered by a modern award or enterprise agreement do not have access to unfair dismissal remedies unless their employment contract provides such rights. This means that if their employment is terminated, they might not be able to make an unfair dismissal claim under the Fair Work Act.
Moreover, the High-Income Threshold determines eligibility for guarantees, such as maximum weekly hours of work, requests for flexible working arrangements, rest periods, and annual leave, among others.
Changes in the High-Income Threshold
The Fair Work Commission reviews the High-Income Threshold every fiscal year, starting on 1 July. The adjustment is based on the Australian Bureau of Statistics’ (ABS) wage price index, considering the movement of full-time adult average weekly ordinary time earnings.
Navigating the High-Income Threshold
Understanding the High-Income Threshold is essential for both employers and employees. Employers need to be aware of the HIT to ensure they are correctly applying the Fair Work Act’s protections, while employees must understand their rights under the legislation.
Remember, the HIT is a nuanced part of employment law, and it’s often a good idea to seek professional advice if you have specific questions or concerns. Understanding the implications of the High-Income Threshold can help employers and employees alike to navigate their rights and obligations effectively.
Stay informed, understand the law, and ensure that your workplace remains fair, balanced, and harmonious. With this knowledge at your fingertips, you can confidently navigate the world of work in Australia under the Fair Work Act.
Need HR Advice?
Liquid HR is a leading HR consulting firm helping businesses of all sizes to navigate the complexities of human resource management, while providing tailored HR services based on their unique requirements, including HR Outsourcing, Recruitment and HR Advisory Services.
With offices in Melbourne, Sydney and Brisbane, we work with businesses across Australia.
For more information, please contact us on 1300 887 458 and speak with one of our HR Consultants.
