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:

  • age
  • job classification
  • industrial instrument.

Special national minimum rates have also been set for trainees, apprentices and juniors who are not covered by any other award or agreement. These applied from the first pay period on or after 1 July 2010.

What can be included in an ‘hourly rate of pay’?

In the building and construction industry, an employee’s hourly rate of pay can also include allowances or an employment type loading. An employee’s hourly rate of pay can include:

  • a base or minimum pay rate
  • special allowances 
  • industry allowances
  • a daily hire loading (for daily hire employees only)
  • a tool allowance
  • a trade allowance.

An employee’s hourly rate of pay is usually the rate used to calculate overtime and leave. An hourly rate of pay can also be known as an “All-purpose rate of pay”.

From 1 July 2020, under the Building and Construction General On-Site Award 2010 (Building Award), the special allowance has been removed from the Building Award.

Full details of hourly rates of pay will be included in a workplace industrial instrument.

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.

From 1 July 2020, there are different industry allowances under the Building Award depending on which sector of the building industry the employee works in. For employees working in the:

  1. general building and construction industry, civil construction industry, metal and engineering construction industry – the industry allowance is 6% of the weekly rate
  2. residential building and construction industry – the industry allowance is 4.8% of the weekly rate

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.

From 1 July 2020, under the Building and Construction General On-Site Award 2010 (Building Award), the special allowance has been removed.

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 and maintaining tools essential to a particular type of work.

From 1 July 2020, under the Building Award, there are additional obligations for employers to reimburse tools, protective clothing and equipment or steel toe capped safety boots in certain situations. 

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.

From 1 July 2020, some trade allowances have been removed from the Building Award.

Full details of any trade allowances will be included in a workplace industrial instrument.