27 February What is the MITA: Qualifying for commission-only employment February 27, 2018 By Reef Admin Real Estate Industry Award 0 A new acronym is about to enter the real estate industry's lexicon. From 2 April 2018, references to commission-only employment will be uttered in the same breath as "MITA" – Minimum Income Threshold Amount. Under the new Real Estate Industry Award, where an employer wants to engage an employee on a commission-only basis, they’ll need to ensure the employee meets the Minimum Income Threshold Amount (MITA) qualification criteria. Employers will also need to re-assess the performance of commission-only employees at the end of each 12 months of employment to determine if the commission-only arrangement can continue. What is the MITA? The MITA is the salary target that must be satisfied if an employee is to be lawfully engaged on a commission-only basis. If an employee can show that, in any consecutive 12-month period during the last three years, they received a salary (including bonus payments) at least equal to 125 per cent of the employee’s minimum award rate of pay calculated as an annual amount (excluding statutory superannuation and allowances, such as car and phone), the MITA is satisfied and the employee is eligible for commission-only employment. How much is the MITA? As at 2 April 2018, the MITA will be $52,733. This figure will increase annually in line with minimum wage adjustments, and will likely change on 1 July 2018 and each July thereafter. What is the annual MITA review? The new Real Estate Industry Award requires the gross income of a commission-only employee to be reviewed annually. This annual review is mandatory. For employees employed prior to 2 April 2018, the first annual assessment will need to occur by 1 April 2019. For employees employed after 2 April 2018, the first annual assessment will take place 12 months after the commencement of employment. If the review establishes that the gross income of the commission-only employee for the year under review was less than the MITA, the employee is not permitted to continue being employed on a commission-only basis. If an employee continues to be employed on a commission-only basis after failing an annual MITA review, serious consequences may potentially flow for employers (including penalties for breach of the award and underpayment claims). Qualifying criteria Before an employee is permitted to be engaged on a commission-only basis, they must: Be engaged in either property sales or commercial, industrial or retail leasing at the Representative Level (Real Estate Employee Level 2) or higher. They cannot be engaged as a casual or junior, at the Associate Level (Real Estate Employee Level 1) or as a trainee; AND Agree in writing to be remunerated on a commission-only basis and have a written agreement that sets out the basis upon which commission is to be calculated; AND Have been issued with either a Real Estate Licence or be registered or permitted to perform the duties of a real estate salesperson under real estate law; AND Have been employed in property sales or commercial, industrial or retail leasing for a consecutive period of at least 12 months in the three years prior to entering into the commission-only agreement; AND Be at least 21 years of age; AND For an employee employed on a commission-only basis after 2 April 2018, they must establish (with the present or any past employer) that they have achieved the Minimum Income Threshold Amount (MITA). Note: An employee who qualified to be employed on a commission-only basis prior to 2 April 2018 will continue to be eligible for commission-only employment under the new Real Estate Industry Award, as long as the employment with that employer continues and subject to them continuing to meet the MITA at the annual review. Questions? If you’re looking for guidance about how to best manage a situation where a commission-only employee’s gross income has, or is likely to, fall below the MITA, give REEF a call on 1300 616 170. One of our Workplace Relations Advisors will answer all your questions. Related What are my employment obligations under the NES? The National Employment Standards are a critical component of the employment safety net for Australian workers. Here we explain the 10 standards. 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