This guide will cover the following aspects of outer limits in Tanda:

Some Modern Awards contain annualised wage clauses. These clauses allow employers to pay annual salaries to their employees, provided they meet certain conditions.

One of those conditions is that they top up the employee's salary if they worked more overtime or penalty rate hours in a pay or roster cycle than is accounted for under the annual salary provisions of the Award.

One example of an outer limits clause can be found in clause 24.2 of the Hospitality Industry General Award 2020. Clause 24.2(b) provides that an employee on an annualised wage arrangement must not be required to work more than 18 penalty hours and 12 overtime hours per week:

24.2(b) The employee must not be required by the employer in any roster cycle to work in excess of:

(i) an average of 18 ordinary hours which would attract a penalty rate under clause 29.2(a) of this award per week, excluding hours worked between 7.00pm to midnight; or

(ii) an average of 12 overtime hours per week in excess of ordinary hours

without being entitled to an amount in excess of the annualised wage in accordance with clause 24.2(c).

In addition to the above, clause 24.2(c) indicates that if an employee exceeds the limits prescribed by clause 24.2(b), such hours are not covered by the annualised salary and will need to be paid for separately and in addition to the annualised salary:

24.2(c) If in a roster cycle an employee works any hours in excess of either of the outer limit amounts specified in clause 24.2(b), such hours will not be covered by the annualised wage and must separately be paid for in accordance with the applicable provisions of this award.

Outer limits are Award specific and will vary for each Modern Award. Some Awards allow employers and employees to define their own outer limits by mutual agreement. If the outer limits have been prescribed, you will find these detailed in the annualised salary provisions of the Award.

In Tanda, the Restaurant Industry Award and Hospitality Industry Award managed templates have been configured with outer limits per the provisions of each Award.

You can check if the managed template you have enabled has outer limits configured in the managed template settings:

In Tanda, you can manage outer limits as prescribed by your Award using the Wage Compare feature.

If your Award prescribes set outer limits like the Hospitality Industry Award, you will need to ensure you remain compliant with these provisions over time.

You can utilise the Wage Compare feature to see if the employee would have been paid more if they had been paid penalty rates or overtime under the Award instead of their salary.

To learn more about the Wage Compare feature in Tanda please see here.

The outer limits configured in the managed template can be added to an employee's Wage Compare profile.

If you are going to use Wage Compare to manage outer limits in Tanda, you will need to configure a Wage Compare profile for any employees that have annualised wage arrangements.

You will find that there is further configuration available on the Wage Compare profile to set outer limits.

If you are using a managed template that has outer limits configured, the outer limits settings/fields will be pre-populated with the limits from the Modern Award:

Some Modern Awards allow the employer to set their own outer limits for their employees. If the Award does not detail set outer limits and these can be set to the limits that you wish to test against:

In terms of Averaging cadence, as with the outer limits, each Award may have a different cycle or period that the outer limits must be tested against. For instance, the Hospitality Industry General Award refers to a 'roster cycle'.

To account for the ambiguity across Awards you may set up the limits to be tested against a Each Pay Cycle, Each Overtime Averaging Period or Custom:

Selecting Each Pay Cycle will have Tanda run the outer limits calculation against the pay cycle that applies to the employee:

Selecting Each Overtime Averaging Period will have Tanda look to the profile configuration for the employee in question to generate the testing outcome:

Selecting Custom will offer additional options for you to choose to test against, perhaps to align with the roster cycle or agreed cycle:

The Cycle Length is the period of time you are conducting the test over, and the Anchor Date is where the cycle begins (e.g. the date the roster cycle begins).

Once the Wage Compare profiles are configured for the relevant employees, you can run the Wage Compare report and export the outer limits test in spreadsheet format by pressing the Download Compared Costs button when in Wage Comparison reporting:

Within the export Tanda will accumulate the costs you would have to pay, aligned to the applicable award rate specified in the wage comparison set on the employee profile, and only after the employee's configured outer limits are exceeded.

In the example below we set the limits for both penalty hours and overtime hours at 5. Note that the overtime hour costs only begin accumulating once the 5 hour limit has been reached:

The outer limits top up you may be required to make is at the bottom of the Total Outer Limit Penalty Cost and Total Outer Limit Overtime Cost columns for each employee.

You can take this number and make an easy top up via a custom allowance. For more information about how to top up an employee's pay please see How to 'top up' an employee's pay in the wage compare article here.