If you employ software engineers, data scientists, environmental scientists, graduate engineers, or quality auditors, there is a good chance the Professional Employees Award 2020 [MA000065] applies to your business. That is true even if you pay a generous salary, and even if your staff are not in the technology or engineering industries in any obvious sense.
This article explains what the Award is, who it covers, what its main entitlements require, and where employers — particularly those running small-to-medium technology, consulting, or professional-services teams — most often run into compliance problems.
What the Professional Employees Award is
The Professional Employees Award is a modern award made under the Fair Work Act 2009 (Cth). It sets minimum terms and conditions of employment — pay rates, hours of work, overtime, penalty rates, and allowances — for employees in four professional streams:
- Professional engineering — graduate and experienced engineers across disciplines
- Information and communications technology (ICT) — software engineers, systems analysts, cybersecurity specialists, and similar roles
- Professional scientific — chemists, research scientists, and related disciplines
- Quality auditing — quality auditors and senior auditors
The Award sits on top of the National Employment Standards (NES), which provide a separate floor of entitlements applying to all national system employees. Where both apply, an employer must meet the higher of the two obligations — you can always give your people more, but never less than the combined minimum.
Who is covered
Coverage turns on what an employee actually does, not what their job title says. The Award applies where an employee's principal duties place them within one of the four professional streams listed above, and where their qualifications or experience meet the threshold for the relevant classification.
Common examples of covered employees include degree-qualified engineers and scientists; ICT employees who have sufficient qualifications and experience to become a Certified Professional of the Australian Computer Society; engineers and scientists eligible to join Engineers Australia or the Royal Australian Chemical Institute; and quality auditors with relevant professional auditing qualifications or experience.
The Award is notable in that it is not industry-confined for professional engineering and scientific employees — it can apply regardless of the sector you operate in, provided the employee's duties match. ICT, quality auditing, and medical research employees are typically covered where the employer is principally engaged in those fields.
Who is not covered
The Award excludes employees covered by other awards (including the Nurses Award, Rail Industry Award, and Electrical Power Industry Award). Senior managers whose role has expanded beyond the professional streams — involving broad executive or business leadership responsibilities — are generally not covered. The Award also does not apply to genuine independent contractors, though the difference between an employee and a contractor is assessed on the substance of the working arrangement, not its label.
The main entitlements
Ordinary hours and overtime
Ordinary hours under the Award are 38 hours per week. An employer and employee may agree to average ordinary hours over a period of up to 13 weeks, which can be useful for teams with project-driven or cyclical workloads.
For hours worked beyond 38 per week, full-time and part-time employees are entitled to payment at their minimum hourly rate. This is a straightforward overtime entitlement — no multiplier applies under the Award itself, but the minimum hourly rate for each classification still applies to every hour of overtime.
One important exception: employees whose contractual annual salary exceeds their classification minimum by 25% or more are exempt from the overtime, penalty rate, and TOIL provisions. At Level 1 (graduate professional), that exemption threshold starts at approximately $79,744 per year based on the 1 July 2025 rates. At Level 4, it sits above $115,900. If a salary does not clear the relevant 25% threshold, those provisions apply in full regardless of what the contract says.
Penalty rates
From 16 September 2023, the Award was varied to introduce penalty rates for certain hours and days. For full-time and part-time employees who are not exempt:
- 125% of the minimum hourly rate for hours worked Monday to Saturday before 6:00am or after 10:00pm
- 150% of the minimum hourly rate for hours worked on Sundays, at any time
- 150% of the minimum hourly rate for hours worked on public holidays
Casual employees attract an additional 25% casual loading on top of those rates.
These changes were significant for technology teams running out-of-hours deployments, on-call rosters, or overnight maintenance windows. If your salaried ICT staff are not above the 25% exemption threshold, penalty rates now apply to those shifts.
Time off in lieu (TOIL)
Instead of paying overtime, an employer and employee may agree in writing to substitute time off in lieu. Each TOIL arrangement requires its own written agreement, made before or at the time the overtime is worked. The time off must be taken within six months of the overtime being worked. If it is not taken within that window, the employer must pay out the overtime at the applicable rate in the next pay period. Untaken TOIL is also paid out upon termination.
Classification levels and minimum pay rates
The Award sets five classification levels, each linked to a minimum annual salary (effective 1 July 2025):
| Classification | Minimum annual salary |
|---|---|
| Level 1 — Graduate Professional (3-year degree) | $63,795 |
| Level 1 — Graduate Professional (4–5 year degree) | $65,430 |
| Level 2 — Experienced Professional | $75,261 |
| Level 3 — Professional / Senior Auditor | $82,250 |
| Level 4 — Professional | $92,767 |
| Level 5 — Experienced Medical Research Employee | $111,756 |
Classification is based on the employee's duties and level of responsibility — not solely on years of experience or the title on their contract. Misclassification at a lower level is one of the more common causes of underpayment exposure in professional services teams.
Annualised salaries and reconciliation
The Award does not establish a formal annualised wage arrangement clause in the same way some other awards do. What it does establish is the 25% exemption threshold described above. For employees who are not above that threshold, paying a flat salary does not automatically discharge overtime or penalty rate obligations — if ordinary-hours work plus overtime and penalties would exceed the salary actually paid in a given period, the difference is owed.
The practical consequence is that employers paying salaries in the band between the Award minimum and the 25% exemption threshold need a reliable way to track when employees work beyond 38 hours, before 6am, after 10pm, on Sundays, or on public holidays — and to reconcile that exposure against the salary paid.
Where employers most often get it wrong
Assuming a salary extinguishes all Award obligations. A salary does not replace the Award; it offsets it. Unless the salary clears the 25% exemption threshold for the relevant classification, every hour of overtime and every penalty-rate shift needs to be accounted for.
Overlooking classification on hire and on promotion. Starting an employee at the wrong level — or failing to reclassify when their responsibilities grow — creates a running underpayment risk. The Award requires classification by reference to duties, not just qualifications.
Treating TOIL informally. The Award requires a written agreement for each TOIL arrangement. Verbal agreements, or blanket TOIL policies that do not meet the written-agreement requirement, do not satisfy the Award. Time that is not properly documented as TOIL remains payable as overtime.
Missing the 2023 penalty rate changes. The overtime and penalty rate provisions were only introduced from 16 September 2023. Some employers have continued to operate under the pre-variation assumption that the Award did not deal with after-hours or weekend penalties. It does now, subject to the 25% exemption threshold.
Assuming the Award does not apply because the business is not a "tech company". Professional engineering and scientific employees can be covered regardless of which sector the employer operates in. An engineering firm in construction, a scientific consultancy in primary industries, or an in-house technology team in a financial services business can each be covered by the Award.
How Artificer Legal can help
The Professional Employees Award is technically straightforward in structure but easy to misapply in practice — particularly where businesses are running salaried professional teams with irregular hours, on-call arrangements, or project-driven overtime. Getting the classification and exemption threshold analysis right at the outset avoids the more expensive problem of discovering an underpayment accumulation two or three years later.
Artificer Legal works with small-to-medium businesses to:
- Audit existing classification levels against the Award definitions and identify any exposure
- Draft or review employment contracts to accurately reflect whether a salary offsets Award entitlements, and under what conditions
- Structure compliant TOIL arrangements and the written agreements that underpin them
- Advise on the 25% exemption threshold calculation for each classification, including where salaries sit close to the line
- Assist with reconciliation processes for businesses that need to establish a defensible ongoing record
The key point
The Professional Employees Award applies to a wide range of engineering, ICT, scientific, and auditing roles — and a salary does not by itself displace its minimum entitlements. The 25% exemption threshold is the key dividing line: employees above it are largely exempt from overtime and penalty provisions; those below it are entitled to them in full. The 2023 variation brought penalty rates into the Award for the first time, which means after-hours deployments, weekend work, and public holiday shifts now carry cost implications that did not previously exist for this category of professional employee.
If you are unsure whether the Award covers your team, how to classify a role correctly, or whether your salaried arrangements create underpayment exposure, the time to work through it is before a Fair Work investigation — not during one.