FairCheckAward coverage › Award-free employees

What if no Modern Award applies?

Start by doubting it. Award-free employment is considerably rarer than most employers assume, and the assumption is expensive when it turns out to be wrong.

Where someone genuinely is award free, they still get the national minimum wage and the National Employment Standards. What they lose is the award layer: classification-based minimum rates, penalty rates, overtime, loadings and allowances.

General information about Australian award coverage, current at 2 September 2026. Not legal advice. The high income threshold is indexed each 1 July, so confirm the current figure with the Fair Work Ombudsman before relying on it.

The 2020 change that caught a lot of employers out

From 1 July 2020 the Fair Work Commission expanded the coverage of the Miscellaneous Award. Two changes matter.

The practical effect is that a set of roles employers had treated as award free became covered, with minimum rates, penalties, overtime and allowances attached. If your award-free list was drawn up before 2020 and has not been revisited, it is worth revisiting.

The three real routes to award free

RouteWhat it requiresWatch out for
No award covers the workNo industry award, no occupational award, and the Miscellaneous Award does not reach itThe Miscellaneous Award now reaches further than it did before July 2020
High income employeeA written guarantee of annual earnings at or above the high income threshold, $190,100 from 1 July 2026The guarantee is a formal requirement. Paying above the threshold without one does not work
Genuinely not an employeeA real independent contracting relationshipSham contracting carries its own penalties, and the label on the contract is not decisive

The high income exemption is narrower than it sounds

A modern award does not apply to an employee for a period during which they have a guarantee of annual earnings at or above the high income threshold. From 1 July 2026 that threshold is $190,100, up from $183,100.

Two things get missed. First, the guarantee is a formal, written undertaking for a guaranteed period, not simply a description of what someone earns. No guarantee means no exemption, however large the salary. Second, the award may still cover the employee even while it does not apply to them, which matters for other purposes such as unfair dismissal eligibility.

The threshold is indexed annually on 1 July, so a figure that was right last year may not be right now.

A salary is not an exemption

This is the most common version of the mistake, and it does not involve award-free employment at all. Paying an annualised salary does not remove award coverage. Where an award applies, the salary must be measured against everything the award would have produced for the hours actually worked, including penalties, overtime, loadings and allowances.

Many awards contain annualised wage arrangement clauses with their own requirements: a written agreement, records of hours, and periodic reconciliation against what the award would have paid. A salary that looks generous against the base rate can still fall short once weekend work, overtime and allowances are added up, and the reconciliation is what surfaces that.

What still applies to a genuinely award-free employee

How to make the call defensibly

If you conclude someone is award free, write down how you got there: which industry and occupational awards you checked, why the Miscellaneous Award does not reach the role, and, if you are relying on the high income route, where the signed guarantee of annual earnings is filed. Date it and review it annually.

Award-free is a conclusion, not a starting assumption. Where an employer cannot produce adequate records, the onus can shift onto the employer to disprove an alleged underpayment, and "we always treated that role as award free" is not a record.

Common questions

Are managers and senior staff award free?

Not automatically, and this assumption causes real liability. From 1 July 2020 the Fair Work Commission expanded the Miscellaneous Award, removing the exclusion that turned on the nature or seniority of a role and deleting the clause that excluded employees whose employer was covered by an industry award that did not classify their role. Roles previously treated as award free on seniority grounds may now be covered. Seniority, a salary, and a management title do not by themselves take a person outside the award system.

Does a high salary make an employee award free?

Only in specific circumstances. A modern award does not apply to an employee for a period during which they have a written guarantee of annual earnings at or above the high income threshold, which rose to $190,100 from 1 July 2026. The guarantee is a formal requirement, not merely a level of pay, so simply paying someone above the threshold without one does not remove award coverage. The threshold is indexed each 1 July, so the current figure should be confirmed with the Fair Work Ombudsman rather than assumed.

Does an annual salary remove the need to follow the award?

No. Paying an annualised salary does not remove award coverage. Where an award applies, the salary has to be measured against everything the award would have produced for the hours actually worked, including penalty rates, overtime, loadings and allowances. Many awards contain annualised wage arrangement clauses with their own requirements for written agreement, record keeping and periodic reconciliation. A salary that comfortably exceeds the base rate can still fall short once weekend, overtime and allowance entitlements are added up.

Test the assumption, not just the arithmetic

FairCheck checks pay against the award and classification that actually fit the work, including salaried staff whose annualised arrangement has never been reconciled. In beta now, with early access opening to the waitlist first.

Join the waitlist The five-step coverage method

FairCheck provides information about Australian pay rules and does not provide legal advice or guarantee compliance. Award coverage and the high income exemption depend on specific facts, and the high income threshold and national minimum wage are indexed annually. Official information is available from the Fair Work Ombudsman at fairwork.gov.au.