CFMEU Award Compliance Made Simple

CFMEU sites run on complexity. They feature multiple employment types, classification levels (ranging from CW1 to CW9), RDOs that even experienced payroll staff find confusing, and allowances buried in clauses nobody reads. Underneath all of that, the building and construction award (MA000020) sets the floor for what you must pay. 

Get it wrong, and the Fair Work Ombudsman might come knocking.

This is a simple breakdown of the complex Building and Construction General On-site Award, how CFMEU EBAs sit on top of it, and how the right software can take the whole thing off your plate.

Key Takeaways

• The Building and Construction General On-site Award (MA000020) covers most on-site construction workers (tradespersons, labourers, plant operators, and apprentices).
• There are nine main classification levels (CW1–CW9), each with different base rates, all-purpose allowances and penalty rate triggers.
• RDOs accrue at 0.4 hours per day worked, generating one paid day off every 19 working days in a 20-day cycle. Getting this wrong is one of the most common payroll errors in construction.
• An EBA doesn’t replace the award. It must pass the Better Off Overall Test (BOOT), and it still triggers award-derived obligations across allowances, penalty rates and overtime.

What is the Building and Construction General On-site Award (MA000020)?

The Building and Construction General On-site Award is the Modern Award that governs minimum pay and conditions for employees working in on-site building, engineering and civil construction. Its full name is the Building and Construction General On-site Award 2020 – but don’t let the “2020” fool you. The Fair Work Commission updates it every year. The most recent wage increase of 3.5% took effect from 1 July 2025.

The award covers a broad spread of work: residential builds, commercial projects, civil construction, demolition, site clearance, earthworks, and any associated installation or landscaping tied to a general building project. It also covers labour-hire businesses and their employees who are placed with organisations in the building and construction industry. So, if you’re supplying trades or labourers to sites, the building and construction award applies to your workers regardless of where they’re directed.

What the award doesn’t cover matters just as much. Electricians, plumbers, and HVAC workers often fall under separate categories. If you’ve got mixed crews across trade types, you may be managing multiple awards simultaneously. The Fair Work Ombudsman’s Pay and Conditions Tool is the starting point for confirming coverage, but getting qualified advice before structuring your employment arrangements is worth the time.

Who Does the Construction Award Cover?

The building and construction industry covers any: 

• Construction, alteration, extension, restoration, repair, maintenance, demolition or dismantling of buildings
• Structures or works that form part of land
• Site clearance, excavation and site restoration work

Covered workers include bricklayers, carpenters, plasterers, painters, roof tilers, scaffolders, plant operators, general labourers, and apprentices in these trades.

There are four employment types under the award:

• Daily hire – engaged day to day, with one day’s notice of termination required from either side
• Full-time weekly hire – 38 ordinary hours per week
• Part-time weekly hire – less than 38 hours, with hours agreed upfront
• Casual – minimum 4-hour engagement per shift

Daily hire is the dominant arrangement on most sites. It’s also the one most likely to catch employers off guard when it comes to redundancy. Under the building and construction award, a daily hire employee with 12 months of service is entitled to a redundancy payment, regardless of the reason for employment ending, including resignation. 

Understanding Classification Levels in the Building and Construction Award

The award uses a CW (Construction Worker) classification scale from CW1 through CW9, plus ECW (Engineering Construction Worker) equivalents for engineering and civil construction work. Each level reflects experience, qualifications and the type of work performed.

CW1 is the entry level: a labourer working under general supervision, no experience or formal qualifications required. By CW3, you’re looking at trade-qualified workers. CW5 and above cover higher-skilled trades, advanced plant operation and supervisory roles.

Getting the classification right matters because it sets the base rate, which flows through to overtime calculations, shift loadings, and all-purpose allowances. There are no junior pay rates under the Building and Construction Award. All employees, other than apprentices, are paid adult rates regardless of age.

Misclassification is one of the most common compliance failures in the industry. 

Penalty Rates, Overtime and Shift Loadings

This is where the building and construction award gets genuinely complex and where most payroll errors hide.

• Overtime: Ordinary time is 38 hours per week, worked 7am–6pm Monday to Friday. Where the relevant penalty rate is 150%, casual employees are paid 175% of their ordinary hourly rate; where the relevant penalty rate is 200%, casual employees are paid 225% of their ordinary hourly rate.
• Public Holiday Casuals: A casual employee required to work on a public holiday must be paid 275% of the ordinary hourly rate for their classification.
• Minimum Break: If an employee hasn’t had at least 10 consecutive hours off duty after working excessive overtime, any time worked under those conditions must be paid at 200% of the ordinary hourly rate.

Shiftwork adds another layer. The definitions of afternoon and night shifts differ between the general building sector and the civil sector. Apply the wrong definition, and you’re using the wrong penalty rates for every shiftworker on that project.

The safest approach is an award interpretation software that handles these distinctions automatically, rather than relying on payroll staff to manually cross-reference which sector rules apply to which crew.

Allowances You Might Be Missing

The construction award contains multiple allowances that are real obligations, not optional extras. Many employers either miss them or underpay them.

Industry Allowance

The industry allowance for general building and construction, civil construction and metal and engineering construction is 6% of the weekly standard rate. For residential building and construction, it’s 4.8%. This is an all-purpose allowance – it’s included in the base rate and flows through to penalty rate calculations. 

Fares and Travel Allowance

Employees who start and finish work at a construction site (rather than at a depot or office) are entitled to the daily fares and travel allowance. If you provide a fully maintained vehicle or arrange transport from the employee’s home, this doesn’t apply. But if workers are making their own way to the site daily, it does.

Tool Allowance

Tradespersons are entitled to a tool allowance for the maintenance, repair and provision of standard tools of trade.

Distant Work

If an employee is required to work at a construction site outside the metropolitan radial area of their usual place of residence and it’s a significant distance away, they’re entitled to a distant work payment. This covers travel time outside ordinary hours at the ordinary hourly rate, plus vehicle costs when they use their own car. 

Multi-storey, underground, and site-specific allowances also apply in relevant situations and are often missed. 

How RDOs Work – and Why People Get Them Wrong

Ordinary working hours are 38 per week, averaged over a 20-day, 4-week cycle. Each day, 0.4 of an hour accrues towards a rostered day off (RDO) and 7.6 hours are paid. After 19 days worked, an employee has accrued 7.6 hours – one full RDO, taken on the 20th working day of the cycle.

The four mistakes that come up most often:

1. RDOs accrue during leave. Employees accrue 0.4 hours towards an RDO for any public holiday where they’re not required to work, and for each day of paid leave taken. Your payroll system needs to handle this automatically, or you’re systematically under-accruing across every employee.
2. Working on a rostered RDO isn’t just overtime. An employee who works on a day rostered as their RDO is paid at Saturday penalty rates and retains the accrued RDO. They keep the day, you pay the penalties.
3. Banking RDOs have a cap. The number of accrued RDOs banked cannot exceed five at any time. Once that cap is hit, the obligation to take the RDO becomes immediate.
4. Termination requires a full payout. On termination, every accrued and banked RDO must be paid out. If your system hasn’t been tracking accruals correctly, you won’t know what you owe until it’s too late.

A spreadsheet or a generic payroll platform not built for construction needs manual intervention and takes time. Timesheets built for construction automate the 0.4-hour daily accrual, flag when banking limits are approaching, and generate a clean audit trail if the FWO ever comes looking.

EBAs vs the Modern Award: Which One Applies?

A CFMEU Enterprise Bargaining Agreement is a negotiated instrument between an employer and their employees. When one is in place, it takes precedence over the construction award – but only where it provides equal or better conditions overall. That’s the Better Off Overall Test, or BOOT.

The practical effect: an EBA doesn’t erase the award. It overlays it. Any entitlement not specifically addressed in the EBA reverts to the building and construction award or the NES. If your payroll team assumes the EBA covers everything and stops checking the award, the gaps accumulate quietly.

EBAs also tend to carry higher base rates alongside tighter conditions on casual employment and overtime. Under the CFMEU template EBA, casuals must work a full 8-hour day, whereas under the modern award, they must work only 4 hours. And overtime is payable at double time for all hours, compared to time and a half for the first two hours, then double time under the award.

Those differences materially change your labour cost model. If you’ve priced a project on award-level assumptions and your workforce is covered by a CFMEU EBA, you’ve got a problem before the first shift starts.

What Happens When You Get It Wrong

The FWO treats building and construction as a priority enforcement sector and has for years.

The FWO recovered $358 million for more than 249,000 underpaid workers across all industries in 2024–25. Anonymous tip-offs surged to 25,608 reports, up 50% on the previous year, signalling that workers are more aware of their rights. They’re using the reporting tools. Underpayments that sat quietly for years are now triggering investigations.

The FWO has named building and construction as one of its high-risk priority sectors for 2025–26, alongside aged care, agriculture and universities.

Underpayment claims can go back six years. Six years of miscalculated RDO accruals, missed fares allowances, or wrong classification rates across a workforce of fifty people add up. The investigation doesn’t wait for the error to be recent.

Construction payroll software built for the award eliminates that risk. And payroll compliance software with automated award interpretation means the rules update when the FWC issues a new determination, not when someone gets around to updating a spreadsheet.

Stop Patching the Award Manually

If your payroll process involves someone manually applying classification levels, calculating RDO accruals, cross-checking fares allowances and monitoring EBA obligations at the same time, that person is doing a hard job with the wrong tools. The building and construction award is genuinely complex. It’s built for an industry with unusual employment patterns, and it expects your systems to keep up.

Wojo HQ is built for construction, labour-hire, and industrial services businesses that use the spreadsheet-and-hope approach.

If the award is costing you more in admin, errors, and risk than it should, it’s time to change the tooling. Get in touch with the Wojo team to see it in practice.