Back pay for a pay raise - when does it start?

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quickymart

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#257425 1-Oct-2019 22:03

My wife has gotten a payraise at her work this year and she's fairly happy about it. However when she received her letter with the new rate, it told her the raise would be effective from middle of October, not the end of the financial year (which has been the case at almost every company she and I have ever worked at); ie, the raise is usually effective from July 1 and backdated/back paid.

Is this the law however, or can an employer say we're going to raise your pay and just start the new rate at any old time? I couldn't find much on the Government websites about it.

Thanks in advance :)

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#2328209 1-Oct-2019 23:01

It's been a long time since the Government was involved in general wage orders. Pay rises are usually negotiated with dates and amounts agreed either by individuals or by unions. What does her contract say?

smcc

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#2328211 1-Oct-2019 23:07

No, it's not the law, it can be any time, if your employer is generous it could be more often. It may be detailed in the Employment contract. However many employers will have a performance-based process that is often Annual.

can an employer say we're going to raise your pay and just start the new rate at any old time? This!

I should say this obviously doesn't apply to statutory increases like a rise in the minimum wage if that is applicable.

Jase2985

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#2328226 2-Oct-2019 04:51

what ever date they have said in the letter is the date the pay will be raised from. the financial year is irrelevant. its likely it was just convenient for the other employers.

Linux

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#2328232 2-Oct-2019 06:50

What would make you think pay rises could only start on a certain date of the year? That is just really bizarre!

If my boss said from next week we will pay you an extra $1 per hour then it starts next week and would reflect in the following weeks pay packet

littlehead

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#2328306 2-Oct-2019 09:52

Pay rise dates can be anything really, its what is in your employment agreement and/or whatever HR policies there may be for the company which you agree to when you sign up. Generally I've seen either a fixed date company wide or contract anniversary date as the day used. Doing it at the start of a financial year company wide would be a financial thing to keep all extra costs in one financial year and not having to do any salary accruals at the end of the year to give the accountants less work.

trig42

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#2328317 2-Oct-2019 10:12

Our company has pay reviews in October.

For me, that usually means a short meeting with the boss, and a pay rise, showing in the next pay.

Once it was backdated, because the boss was away and didn't tell me about it for a couple of weeks after it had happened (and I never check my pay advice).

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JaseNZ

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#2328431 2-Oct-2019 13:20

Never heard of pay rises being back paid. I do all our staff on an annual basis and if they are in for a pay rise it takes effect in their following pay (as outlined in a letter).

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jonathan18

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#2328449 2-Oct-2019 13:36

In government departments it is common for pay increases as a result of both general band movements and individuals moving between bands to be backdated to the start of the 'performance' year (commonly 1 Jul). So performance for the 18/19 year is assessed in around July/Aug 19, followed by a decision re any movement in pay (with opportunities to review etc), and then paid out in Sept/Oct including any back pay to the start of the new year (1 Jul).

Of course, we also tend to have collective agreements in place, which, even though pay isn't usually negotiated as part of these agreements, will often include at least the basics/framework around remuneration and links to performance.

old3eyes

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#2328468 2-Oct-2019 14:30

JaseNZ:

Never heard of pay rises being back paid. I do all our staff on an annual basis and if they are in for a pay rise it takes effect in their following pay (as outlined in a letter).

Pretty common in the public service to get a pay rise backdated months.

Regards,

Old3eyes

sen8or

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#2328511 2-Oct-2019 15:19

Have had this in some previous roles where they choose an arbitrary date to make the pay rise effective from across the whole company, probably more to do with timing of peoples performance reviews and that even if you happen to get your pay rise a week or 3 earlier than a colleague, there is no advantage / disadvantage as it all goes back to a particular date.

BlinkyBill

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#2328542 2-Oct-2019 15:52

I do my performance reviews and remuneration reviews separately, since for me performance isn’t linked to remuneration. My policy is I pay against the market value of the employee, and I pay top 20% of the market.

so, unless you are improving your value against the market no rem change. I have no employee’s leave me for remuneration reasons. I make my rem policy clear on employing people and reinforce the message next year.

i do back-date rem changes if I am running late on my assessment of the market. But anyone can male a case for a market-related rem change to me at any time - if their case stacks up, I make the change and apply it immediately.

the only exception to the above is graduate/junior recruits, who I coach along more.

my staff do test the market, but as mentioned I have very very low turnover, and can’t recall someone going for more remuneration as the primary driver.

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quickymart

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#2328576 2-Oct-2019 16:51

Linux: What would make you think pay rises could only start on a certain date of the year? That is just really bizarre!

If my boss said from next week we will pay you an extra $1 per hour then it starts next week and would reflect in the following weeks pay packet

Oh, I don't know, just every single company I've ever worked at, including Telstra Clear. Maybe Vodafone didn't do this, I don't know, but I've never really known any differently my entire working life.

As an aside, have I done something to offend you John? Just seems my last couple of posts you've just picked at them without really adding anything useful. Are you having a bad day?

Otherwise, thanks for the useful and helpful comments, seems it differs with every employer. I will let her know.