What is a ‘minimum pay rate’ or ‘base rate of pay’ for the construction industry?
The minimum or base rate of pay is the minimum amount that employees must be paid for their ordinary hours of work. An employee’s base rate depends on their:
- job classification
- industrial instrument.
In the building and construction industry, an employee’s base rate may also include allowances or an employment type loading. When it does, this is known as an all-purpose rate of pay.
Special national minimum rates have also been set for trainees, apprentices and juniors who are not covered by any other award or agreement. These apply from the first pay period on or after 1 July 2010.
All-purpose rate of pay
An all-purpose rate of pay can include:
- a base or minimum pay rate
- industry allowances
- special allowances
- a daily hire loading (for daily hire employees only)
- a tool allowance.
An employee’s all-purpose rate of pay is usually the rate used to calculate overtime and leave.
All-purpose rate of pay allowances
The allowances that typically make up the all-purpose rate of pay may include:
- industry allowance
- special allowance
- tool allowance
- trade allowance.
What is an ‘industry allowance’?
An industry allowance is a payment made to all people who work in a particular industry. This type of allowance is usually paid to compensate employees for having to work under difficult conditions.
This includes things like:
- extreme or inclement weather when working outside
- having to climb steps or ladders
- being exposed to dust blowing in the wind, brick dust and concrete drippings
- sloppy or muddy site conditions
- having to use scaffolds
- having no access to amenities like change rooms, meal rooms or lockers.
Full details of any industry allowances will be included in a workplace industrial instrument.
What is a special allowance?
A special allowance is an individual allowance paid to compensate employees for excess travelling time.
Full details of any special allowances will be included in a workplace industrial instrument.
What is a tool allowance?
A tool allowance compensates employees for expenses that may be incurred when purchasing tools essential to a particular type of work.
Full details of any tool allowance will be included in a workplace industrial instrument.
What are trade allowances?
Trade allowances relate to a specific trade or type of work. Some allowances are paid if an employee works in the trade, while others will require employees to have a specific license or registration for that trade. For example, registered plumbers must be paid a registration allowance.
Full details of any trade allowances will be included in a workplace industrial instrument.