Hospitality and restaurant employers must follow specific rules for full-time staff. Aside from managers, most employees saw major changes to Annualised Wage Arrangements starting in late 2022. Understanding these rules is vital for Fair Work compliance. The Annualised Wage Arrangements Hospitality Award sets out important requirements every employer should know.
What Can a Hospitality Annualised Wage Include?
Employers can now bundle several different costs into one minimum annualised wage. This arrangement can include:
- Minimum award rates for the specific role.
- Allowances for split shifts and other duties.
- Overtime and penalty rates.
- Annual leave loading.
- Public holiday arrangements specific to the Hospitality Award.
Understanding Outer Limits for Overtime
Employees on these wage plans only get extra payments if they cross certain “outer limits.” You must pay more if an employee works:
- An average of 18 penalty hours per week (excluding 10 pm to 12 am, Mon–Fri).
- More than 12 hours of overtime in a single week.
Key Rules for Annualised Wage Arrangements
Fair Work requires that an annualised wage must be at least 25% higher than the weekly minimum award wage. You must calculate this across a 52-week period.
Record-keeping is also a strict requirement. Employers must record every hour worked, including all breaks. The employee must then sign or digitally acknowledge these hours at the end of every pay cycle. If either party wants to end the agreement, they must provide 12 months’ written notice.
Review Your Wage Compliance
We strongly suggest you review your current pay structures. Staying compliant helps you avoid heavy penalties. It also lets you check how often you pay outer limits so you can adjust wages as roles change.
Assurance HR Management can help you define new rates. We have deep expertise in interpreting Awards and creating Employment Agreements.
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