We get it. You care about time. In the legal profession, time IS money.
That’s why at Fairtime, we have put together a straightforward and simple guide to help answer some common questions we hear from legal service providers.
Time Tracking Software and Award Interpretation
Legal time tracking software often ignores the Legal Services Award, causing compliance issues for law firms. It’s important that law firms demonstrate compliance with annualised wage agreements and account for pay rate changes prescribed by Fair Work.
Whilst these firms are able to meet the standard timesheet record-keeping obligations, the records themselves are incomplete – an afterthought that comes second to billable hours and invoicing. Tracking employee work hours is often an afterthought while billable hour records and invoicing take priority.
These blindspots can lead to Fair Work regulation breaches and wider risks to your law firm, including significant reputational damage. Timesheets with built-in award interpretation ensure accurate compliance and minimise legal risks for firms.
Law firms like El Baba, United Chambers, Clayton Utz, Herbert Smith Freehills, Ashurst, Gilbert + Tobin and DLA Piper have all had problems with compliance previously. The underpayment headlines that followed for these firms is the type of negative publicity that you and your firm simply cannot afford.
To perform accurate and consistent reconciliations of payroll, comprehensive reports are needed with breakdowns of all entitlements and classifications. The reports generated from the billable software is inadequate for the purposes of compliance with the Legal Service Award. These records will NOT help law firms to defend their compliance practices during audits or Fair Work investigations.
Under the Legal Services Award, non-fee earners must record their work hours for compliance with Fair Work
Law firms often go with the default timesheet that comes integrated within practice management software. This makes it convenient to track billable hours and manage client matters ONLY. But firms also need a separate timesheet tool to track employee work hours under the Legal Services Award.
Partners and law firm managers are able to use reports to track their team’s productivity and overall profitability as these systems capture billable hours for invoicing and client-billing purposes.
However, despite their convenience, such time tracking software fails to adequately interpret complex rules contained within the Legal Services Award.
For instance, the Legal Services Award sets out intricate regulations regarding overtime, penalty rates, and allowances. Generic time tracking solutions are not designed to handle such nuanced rules, or if they are, they put the onus on the law firms to manually create, manage and update each rule as required.
With such a manual process, there is the potential for errors in calculating the correct pay rates and entitlements for paralegals, law graduates and support staff. These discrepancies then create blind spots in compliance, increasing the risk of underpayments and potential Fair Work investigations.
Legal Services Award Level Classifications
Level 1 vs Level 3 Legal, clerical, and administrative employee
The difference between these two levels can be huge – whilst a Level 1 staffer would simply be expected to identify and assess options available and then advise a senior solicitor, a Level 3 Legal, clerical, and administrative employee would go several steps further in clarifying the problem, researching solutions and implementing them with limited supervision.
They would then additionally evaluate and report on the effectiveness of any action steps taken and assist others with similar problems.
Level 3 employees should possess in-depth knowledge of the relevant field they are employed for (e.g. insurance claims) and be able to demonstrate a broader range of skills whilst completing their work tasks. A common indicative training and education qualification for this level is either a Trade Certificate or equivalent TAFE/Year 12 standard.
Level 4 vs Level 5 Law Graduate Legal Services Award Employee
A Level 4 Legal, clerical, and administrative employee may work independently and be given some responsibility for delegating work to others. The competency required at this level is substantial – however there is less emphasis on formal qualifications.
Under the LSA, a Level 5 Law Graduate is distinguished from all other Legal, clerical, and administrative employees as they will have completed a formal qualification in Law and now undertaking some practical legal training within a law firm to satisfy the requirements of their prescribed PLT provider. Note: this excludes lawyers who are admitted to practice as a Lawyer within Australia.
Overtime and Time off In Lieu for the Legal Services Award
Under the Legal Services Award, overtime applies when any period of time worked is:
◉ outside ordinary hours on any day or shift
◉ in excess of an average of 38 hours per week.
Varying percentages apply depending on the day of the week (including public holidays), whether the staff member is permanent full-time, part-time or casual; as well as if they are shift workers or not.
For example, a Casual staff member who works on a Thursday for 4 hours overtime would be paid their hourly rate for the ordinary hours, as well as 175% of their hourly rate for the first 3 hours and then 225% for that final hour of overtime.
So it becomes clear that with many different staff members, calculating overtime can become a bit of a mess very quickly as the variables stack up!
If your staff work overtime and would prefer time off instead of extra pay, you and your employee can agree on it. This is referred to as Time off in Lieu (TOIL). The staff member gets to enjoy the same amount of time off as the overtime hours they put in. So, if they worked 2 hours of overtime, they would be entitled to take 2 hours of time off from their weekly ordinary hours.
This gives Legal Services Award staff flexibility but can be an administrative challenge without the right timesheet software in place. Remember, for this arrangement to work, both you and your employee must agree in writing each time you work overtime and document this mutual consent.
Managing Overtime under the Legal Services Award effectively
Fairtime timesheet software can effectively manage overtime under the Legal Services Award by automating award interpretation and maintaining up-to-date pay rate libraries.
Here’s how it works:
Award Interpretation
Our software is programmed with the specific rules and regulations of the LSA as it applies to the law firm. It understands the complexities of the Award, including provisions related to overtime, penalty rates, and other allowances. This ensures that the software accurately calculates overtime hours and rates for each employee based on their work hours and shifts, regardless of the variables presented.
Up-to-date Pay Rate Libraries
The software maintains a constantly updated pay rate library that includes the latest information on wage rates, penalty rates, and any other pay-related changes in the Legal Services Award. This ensures that the correct pay rates are applied to employees’ time entries, eliminating the risk of using outdated or incorrect pay rates.
Managing Overtime
During each pay run, Fairtime’s timesheet software automatically identifies overtime hours worked by employees. It considers factors such as the number of hours worked in a day, the total hours worked in a week, and any additional rules in the LSA governing overtime thresholds. Based on this information, the software accurately calculates the overtime pay for each eligible employee.
Customised for Your Requirements
Some firms may have unique overtime rules or arrangements under the Legal Services Award due to separate agreements (e.g. TOIL) or enterprise bargaining agreements. Fairtime has a built-in TOIL agreement template – this ensures that no matter what arrangement you wish to put in place, Fairtime has you covered.
Improved Efficiency during Pay Runs and Reconciliations
Let’s consider an example where an employee works 50 hours in a week under the Legal Services Award. The standard workweek is 38 hours, and any hours worked beyond that qualify as overtime. Fairtime’s timesheet software automatically identifies the 12 hours of overtime and applies the correct overtime rate according to the Award’s provisions. This eliminates the need for manual calculations and ensures that the employee is paid accurately and on time.
Furthermore, if your firm is hit with new pay rate changes that are announced, you won’t be left scrambling at a time in the year when things are already quite busy! With up-to-date pay rate libraries, Fairtime instantly incorporates these changes into the system. As a result, staff pay rates are automatically adjusted without any delays, avoiding potential underpayments or compliance issues.
During reconciliations, the software generates comprehensive reports detailing each employee’s hours, overtime, and pay rates. Managers can quickly review these reports and verify the accuracy of payroll data.
Any discrepancies or missing entries are easily identified, allowing for prompt resolution and minimising the risk of payroll errors.
A final word on compliance with the Legal Services Award
Fairtime goes beyond time tracking and helps law firms meet their compliance obligations in respect to the Legal Services Award. Fairtime timesheets come with built-in award interpretation capabilities, tailored specifically for the legal industry. Our software helps you avoid having to understand and apply the complex LSA rules every time you pay staff. It can accurately calculate overtime, penalty rates, and any additional allowances, ensuring that employees are paid correctly for their work and no entitlements are left out.
Staff are added as users to the timesheet system and they simply enter the hours worked for a typical week – and our software takes care of the rest! Our pay rate engine converts the timesheet into a payslip by automating application of the rules relating to the LSA.
To start improving efficiency and payroll compliance today – sign up for Fairtime’s freemium account for all LSA employers. Say goodbye to time consuming tasks, as we facilitate smooth reconciliations by providing you with comprehensive reports based on your custom needs. Your payroll team will thank you for saving the time and effort and your staff will thank you for taking payroll compliance seriously.
If your law firm is looking for a timesheet software solution with built-in Legal Services Award Interpretation book a 30 min consult with a member of our expert team.
