Important Changes to the Real Estate Award

Several important changes to the Real Estate Industry Award came into effect on 2 April 2018 which have and will impact the employment of many in the real estate industry.

Classifications and weekly wages

The new classifications and wage rates cover employees previously classified as property sales, management and strata/community title management associates. Given these changes, there no longer is a distinction and a remuneration difference between property lease and sale agents, and strata and community title management employees. An employee can perform all these duties concurrently during their employment.

These classifications are:

  • Real Estate Employee Level 1 (Associate Level) with a minimum weekly wage of $728.20 for the first 12 months, and $768.60 thereafter.
  • Real Estate Employee Level 2 (Representative Level) with a minimum weekly wage of $809.10.
  • Real Estate Employee Level 3 (Supervisory Level) with a minimum weekly wage of $890.60.
  • Real Estate Employee Level 4 (In-charge Level) classification which includes licensees-in-charge and agency managers with a minimum weekly wage of $930.50.

Commission only employment

Eligibility

To be eligible for commission only employment, employees need to be meet all of the following requirements:

  • Employed as a Real Estate Employee Level 2 or above;
  • Need to have worked in property sales or commercial, industrial or retail leasing or as a licensed real estate agent for at least 12 consecutive months over the previous 3 years;
  • Must meet the Minimum Income Threshold Amount (MITA) which is 125% of their minimum wage (excluding superannuation) provided by the Award for their employment classification for 12 consecutive months over the previous 3 years;
  • Employees engaged after 2 April 2018, need to meet the MITA requirements;
  • Employees engaged before 2 April 2018, can continue to be remunerate based on a commission-only arrangement provided that their arrangement is reviewed yearly and meets the MITA requirements;
  • Must be above 21 years old.

The commission-only employees must be reviewed every 12 months to ensure they meet the MITA requirements. If MITA requirements are not met, they can no longer be engaged on a commission-only arrangement as that arrangement would breach the Award’s provisions which may trigger financial penalties to the employer.

Minimum commission only rate

The new minimum commission-only rate is now 31.5% of an employer’s gross commission.

Annual leave for commission only employees 

Commission-only employees are still not entitled under the changed to the Award to annual leave loading, however annual leave must be paid at the employee’s base pay rate for their classification at the time of taking leave.

Annual leave payments can now be accumulated as a debit on an employee’s account if their agreement contains a commission only rate that is higher than the new award minimum commission only rate of an employer’s gross commission.

Given the above, the employers can no longer have arrangements with commission-only employees where they agree that the commission made by the employee will cover all their statutory entitlements like annual leave, sick leave or long service leave. Such arrangements are now unlawful and they must be reconsidered.

If you do have commission-only arrangements with some of your employees, or you are considering employing real estate agents on such arrangements, it would be best practice to have the agreements reviewed by a solicitor with expertise in this area of law.

Please contact our Employment and Industrial Law Group if you would like your employment agreements reviewed.