name: au-modern-award-payroll-auditor
description: Audit Australian payroll for Modern Award compliance — identify the correct award and classification, verify base rates, penalty rates, overtime, allowances, casual loading, annualised salary BOOT test, and superannuation against Fair Work Act minimums for Australian businesses.
version: 1.0.0
homepage: https://github.com/arbazex/au-modern-award-payroll-auditor
metadata: { "openclaw": { "emoji": "⚖️" } }
This skill turns the AI agent into a Modern Award payroll compliance auditor for Australian businesses. It covers all 121 modern awards under the Fair Work Act 2009 (Cth), applying the correct penalty rate logic, classification decision trees, overtime calculations, annualised salary BOOT testing, allowance verification, and record-keeping obligations — all grounded in current Fair Work Commission rules (2025–26 rates). Use this skill whenever a user needs to check, audit, or troubleshoot payroll compliance under a modern award.
Trigger on user messages containing:
Do NOT use this skill for:
When a user first raises a compliance question, collect all required context before attempting any calculation. Ask only the questions relevant to their situation. Do not bombard the user with all questions at once — group them logically.
Core intake questions (always required):
Conditional questions (ask only if relevant):
Use this decision tree to determine award coverage. The correct award is one of the most critical steps — misidentification leads to systematic underpayment.
Decision Tree — Award Coverage:
Q1: Is the employee covered by a registered Enterprise Agreement (EA)?
→ YES: EA applies. Modern award is the floor for BOOT testing only.
Confirm EA has not expired (expired EAs continue to operate but
must still meet award minimums via s.206 FW Act).
→ NO: Continue to Q2.
Q2: Is the employee in a national system employer?
→ Almost all private sector employers in all states/territories: YES.
→ WA State public sector: NO — refer to WA IRC.
→ Continue to Q3.
Q3: Does a specific INDUSTRY award cover this role?
Common industry awards:
- Retail trade (shops, supermarkets, petrol stations): General Retail Industry Award 2020 [MA000004]
- Hospitality (hotels, pubs, cafes, restaurants, catering): Hospitality Industry (General) Award 2020 [MA000009]
- Restaurant/café (stand-alone, not hotel-based): Restaurant Industry Award 2020 [MA000119]
- Fast food (McDonald's-style operations): Fast Food Industry Award 2020 [MA000003]
- Building & construction (on-site): Building and Construction General On-site Award 2020 [MA000020]
- Manufacturing: Manufacturing and Associated Industries Award 2020 [MA000010]
- Aged care: Aged Care Award 2010 [MA000018]
- Nurses: Nurses Award 2020 [MA000034]
- Health professionals: Health Professionals and Support Services Award 2020 [MA000027]
- Security: Security Services Industry Award 2020 [MA000022 — Note: verify, actual code is MA000024]
- Cleaning: Cleaning Services Award 2020 [MA000022]
- Hair & beauty: Hair and Beauty Industry Award 2020 [MA000005]
- Storage & wholesale: Storage Services and Wholesale Award 2020 [MA000084]
- Transport: Road Transport and Distribution Award 2020 [MA000038]
- Vehicle repair (mechanic): Vehicle Manufacturing, Repair, Services and Retail Award [MA000089]
→ If industry award identified: proceed to classification (Step 3).
Q4: If no industry award fits, does an OCCUPATIONAL award apply?
- Clerical/admin staff (most private sector industries): Clerks — Private Sector Award 2020 [MA000002]
- IT professionals, engineers, scientists: Professional Employees Award 2020 [MA000065]
- Social, community, disability workers: Social, Community, Home Care and Disability Services Award [MA000100]
→ If occupational award identified: proceed to classification (Step 3).
Q5: If no award covers the role → employee may be award-free.
- Award-free employees: paid at least the National Minimum Wage ($24.95/hr or $948.00/week from 1 July 2025)
- NES entitlements still apply in full.
- No award-specific penalty rates, classifications, or allowances apply.
- Advise user to confirm via Fair Work Ombudsman's PACT tool: https://calculate.fairwork.gov.auKey rule: Award coverage is determined by the nature of the employer's business AND the employee's actual duties — NOT job title alone. A "sales assistant" doing retail duties in a hardware store is covered by the General Retail Industry Award regardless of what the contract calls the role.
Classification determines the minimum base rate. It is the second most common source of underpayment after wrong award identification.
General classification principles:
Common classification markers by award:
General Retail Industry Award [MA000004]:
Hospitality Industry Award [MA000009]:
Clerks — Private Sector Award [MA000002]:
Action: Match the employee's actual duties against the award's classification definitions (found in Schedule B of each award at fwc.gov.au). Present the matching criteria to the user and ask them to confirm.
National Minimum Wage (from 1 July 2025):
Casual Loading:
Junior Rates:
Rate verification formula:
Minimum Payable = Classification Base Rate × Employment Type Multiplier × Penalty/Loading MultiplierPenalty rates are the most frequent source of payroll non-compliance. Apply the following logic carefully.
Core penalty rate table by award type (2025–26):
| Day/Time | Retail [MA000004] | Hospitality [MA000009] | Restaurant [MA000119] | Clerks [MA000002] | Building [MA000020] | Aged Care [MA000018] |
| --------------------------- | ------------------------ | ------------------------ | --------------------- | ----------------- | ------------------------- | -------------------- |
| Ordinary hours | 100% | 100% | 100% | 100% | 100% | 100% |
| Saturday | 125% (perm) | 150% (perm) / 175% (cas) | 125% (perm) | 150% (perm) | 150–200% (varies by time) | 100%–110% |
| Sunday | 150% (perm) / 200% (cas) | 175% (perm) / 200% (cas) | 175% (perm) | 200% (perm) | 200% | 200% |
| Public Holiday | 250% | 250% (perm) / 275% (cas) | 250% | 250% | 250% | 225% |
| Evening (6–9pm) | 125% | 115% | 115% | 125% | N/A | N/A |
| Late night (after midnight) | 150% | 150% | 150% | N/A | N/A | N/A |
IMPORTANT: These are indicative reference rates. Always verify the exact rate for the specific award version and classification on the Fair Work Commission website (fwc.gov.au) before giving a definitive figure.
Penalty rate decision tree:
Q: Is the work being performed on a public holiday?
→ YES: Apply public holiday penalty rate (typically 250% for most awards).
Permanent employees also accrue a substitute day off entitlement if required to work.
→ NO: Continue.
Q: Is the work being performed on a Sunday?
→ YES: Apply Sunday penalty rate for that award and employment type.
→ NO: Continue.
Q: Is the work being performed on a Saturday?
→ YES: Apply Saturday penalty rate for that award and employment type.
Note time-of-day variations (some awards change rate after 6pm Saturday).
→ NO: Continue.
Q: Is the work performed during an evening/late-night span?
→ Identify the award's "span of hours" clause. Most awards define:
- Ordinary hours span (e.g. 7am–9pm Mon–Fri for Clerks Award)
- Work outside this span triggers a penalty loading
→ Check if evening loading applies to the specific hours worked.
Q: Is the work overtime?
→ Overtime = hours worked beyond ordinary hours per day or per week (check specific award trigger).
Most awards: overtime is first triggered after 7.6 hours/day or 38 hours/week.
Some awards: daily trigger after 8 hours.
Overtime rates:
- First 2–3 hours overtime: 150% (Time and a Half)
- After 2–3 hours overtime: 200% (Double Time)
- Overtime on Sunday (some awards): 200% from first hour
→ Apply the higher of overtime rate OR penalty rate (most awards use higher-of rule; some allow stacking — verify per award).
Q: Is the worker a casual?
→ YES: Casual rate = Base × 1.25 × Applicable Penalty Multiplier
BUT check whether the award expresses the casual penalty as a composite rate
(e.g. "200% of minimum rate" rather than "base + 25% + penalty")
Composite rate must not result in less than: base × 1.25 × penalty
→ NO: Apply standard permanent penalty rate.Shift loadings (where applicable):
When does this apply?
An employer pays a flat annual salary instead of calculating all award entitlements separately. This is only permissible if:
Award annualised wage arrangement requirements (Fair Work Act + award clauses):
BOOT Test (Better Off Overall Test):
Step 1: Calculate all award entitlements for a representative roster period:
- Base pay for all ordinary hours
- + All applicable penalty rates (Saturday, Sunday, public holiday, overtime)
- + All applicable allowances
- + Superannuation on ordinary time earnings (OTE)
= Total Award Entitlement (TAE)
Step 2: Compare with actual salary paid for same period
Step 3: If Salary ≥ TAE → BOOT passes (employee is not worse off overall)
If Salary < TAE → BOOT fails → underpayment exists → back pay required
Step 4: After July 1 wage review each year, re-run BOOT because award rates have increased.
A salary that passed BOOT in June may fail BOOT in August if not reviewed.BOOT assessment questions to ask user:
Superannuation Guarantee (SG) rates:
Common super errors:
From 1 January 2024: Superannuation is now explicitly part of the National Employment Standards (NES) under the Fair Work Act. Failure to pay super can constitute underpayment of an NES entitlement, not just an ATO/SG issue.
Under the Fair Work Act and Fair Work Regulations 2009, employers must keep:
Employee records (7 years, accessible to Fair Work Inspectors):
Pay slips (required within 1 working day of payday):
Annualised salary records (additional):
Record-keeping failures are independent contraventions of the Fair Work Act and attract their own civil penalties, regardless of whether underpayment occurred.
From 26 March 2021 (Fair Work Act — Casual Employment Provisions):
A casual employee may have the right to convert to permanent employment if:
Employer obligations:
Casual Definition (from 26 August 2024 — Closing Loopholes No.2):
A casual employee is one where the employment relationship has no firm advance commitment to continuing and indefinite work and no firm advance commitment to regular hours. Courts look at the entire relationship, not just contract terms. Regular, predictable rosters can rebut the casual characterisation even if the contract says "casual".
If non-compliance is identified:
Back-pay calculation formula:
For each pay period in the audit scope:
Hours Worked × (Correct Rate − Rate Actually Paid) = Underpayment for that period
Sum all periods → Total Underpayment
Include:
+ Unpaid allowances for each applicable period
+ Superannuation shortfall (12% of OTE on any underpaid wages)
+ Interest on super shortfall (ATO will calculate SG charge separately)Limitation periods:
Voluntary disclosure:
Criminal penalties (from 1 January 2025 — s.327A Fair Work Act):
Civil penalties (inadvertent non-compliance):
Serious contravention:
For a full payroll compliance audit response, structure output as:
Brief restatement of the scenario based on intake answers.
Present as a table with these columns:
| Pay Element | Award Requirement | Amount Paid | Status | Gap ($) |
| ---------------- | ------------------ | ----------- | --------------------------------------- | ------- |
| Base Rate | $X.XX/hr (Level Y) | $X.XX/hr | ✅ Compliant / ⚠️ Review / ❌ Underpaid | $0 / $X |
| Saturday Penalty | X% | X% applied | ✅ / ❌ | $X |
| ... | ... | ... | ... | ... |
Numbered list of each compliance gap, with:
Total estimated underpayment across audit period (show working).
Practical, prioritised steps. Do not include legal action recommendations.
User cannot identify their award:
→ Ask: "What does the business primarily sell or what service does it provide?" and "What are the employee's main day-to-day tasks?" Use these answers to walk through the award identification decision tree. If still uncertain, direct user to Fair Work Ombudsman's award finder at fairwork.gov.au/find-help-for/payroll.
User provides incomplete hour/roster information:
→ Ask for a specific sample week's roster (days and start/finish times). A single representative week is sufficient for a preliminary assessment. Flag that actual back-pay calculation requires complete records for all periods in scope.
Award has changed since user last checked:
→ Note that all award rates changed on 1 July 2025 (3.5% increase) and that the next change is expected 1 July 2026. If user mentions a rate they are using, ask when they last updated their payroll system.
User is unsure if they have an Enterprise Agreement:
→ Direct to the Fair Work Commission's agreement search: agreements.fwc.gov.au. If no EA is registered, the award applies.
User asks about a very specific or uncommon award:
→ Acknowledge you have general rules for that award category, note the specific award code if known, and direct user to the full award text on fwc.gov.au for clause-level verification.
User presents a situation involving multiple awards (e.g. one business with retail and hospitality components):
→ Assess each category of employee separately against the most applicable award for their primary duties.
User identifies a large underpayment and asks "what do I do now?":
→ Provide the following practical framework (without legal advice):
User: "I have a casual employee working at my clothing store. She works Saturdays 9am–5pm and Sundays 11am–5pm. I'm paying her $28/hr flat all weekend. Is this right?"
Agent action:
Questions asked: "What classification level is she on? And what is the current ordinary (weekday) base rate you use before weekend penalties?"
User provides: "Level 1 base rate is $26.55/hr (2025–26 rate)"
Agent analysis:
Finding: ❌ Employee is being significantly underpaid. $28.00/hr is less than both the minimum casual rate and all applicable penalty rates.
Output: Present compliance table, estimated gap per shift, recommend immediate correction.
User: "I have a full-time restaurant manager on $75,000/year + super. She works 45 hours a week including most Saturday nights. Do I need to worry about award compliance?"
Agent action:
Questions asked: "What does the contract say the $75k covers? And can you give me a typical week's roster — which days and hours does she work?"
User provides: "Contract just says $75k covers all duties. She works Mon–Fri 11am–9pm and Saturday 5pm–midnight."
Agent analysis:
Output: Run BOOT formula, flag whether salary is sufficient, note annualised salary clause requirements (written documentation, outer limits, annual reconciliation), recommend legal review if borderline.
User: "I've been auditing our construction payroll. I think we're paying the right base rate and overtime but a worker flagged we might have missed an allowance. He brings his own tools."
Agent action:
Finding: Tool allowance is a mandatory award entitlement — it cannot be rolled into the hourly rate unless a specific written annualised arrangement covers it and the employee is no better off overall.
Questions asked: "How long has this worker been supplying their own tools? And do you have records of which tools he provides?"
Output: Calculate the missed tool allowance for the audit period, present the back-pay exposure, note that allowance underpayments are independent contraventions of the Act.
User: "I have a 17-year-old working in my café. She's been on $18/hr since she started."
Agent action:
CRITICAL NOTE: $18/hr exceeds the minimum junior rate of ~$15.32/hr — this employee is actually overpaid relative to the minimum. No underpayment. However:
Questions asked: "Has she turned 18 yet? And are you applying the correct penalty rates for the junior rate base — Saturdays, Sundays, and public holidays should still apply the penalty multiplier on top of her junior base rate?"
Output: Confirm no base rate underpayment. Verify penalty rates are correctly applied on top of the junior base (not skipped or applied at full adult rate as flat $18). Remind that once she turns 18, she must move to the 68.3% rate; at 19, 78.8%; etc.
User: "I run a gym. All my trainers are on the Clerks Award because they do admin too. Right?"
Agent action:
Questions asked: "Are the trainers primarily delivering fitness classes, personal training, and gym floor supervision? Or are they primarily performing administrative and clerical duties (reception, bookkeeping, data entry)?"
Output: If primary duties = fitness instruction → Fitness Industry Award applies. Present correct classification levels under that award. Note that applying the wrong award is one of the most common compliance failures and that back-pay liability may exist if Fitness Award rates are higher than Clerks Award rates for any periods.