All full-time employees working within Restaurant and Hospitality Awards, aside from Managerial/Hotel employees, will see considerable changes to rules surrounding Annualised Wage Arrangements, effective from the 1st of September 2022.
What this means for employers is that the minimum annualised wage can now include:
- Minimum award rates for the employee’s role/employment type;
- Split shift and other allowances;
- Overtime and penalty rates;
- Annualised leave loading; and
- For the Hospitality Award it allows for additional public holiday arrangements.
It further specifies that annualised wage employees are only eligible for additional payments, also known as outer limits, if they:
- Work an average of 18 penalty rate hours a week (excluding hours worked between 10pm and 12am, Monday to Friday); OR
- 12 hours overtime.
If an employer chooses to make annualised wage arrangements, there is generally no need to make additional payments or provision of entitlements within an employee’s routine pay, as this has been combined into the overall salary as per the employment agreement. Fair Work have determined that within calculating an annualised wage the employer must pay at least 25% more, across 52 weeks, than the weekly minimum award wage.
There are also additional record keeping protocols that require the employer to record all work hours, inclusive of breaks and to have this confirmed by the employee at the end of every pay cycle, with a signed or digital acknowledgement. Changes to awards also state that either party need to provide 12 months written notice that the arrangement is ending or must both agree in writing that it is to occur prior.
We strongly advise that you review your current wage arrangements and ensure that you are meeting the minimum requirements as specified by Fair Work. Not only does this ensure that you remain compliant and avoid being penalised, it also provides an opportunity to review the frequency of outer limit payments and to adjust wages in response to employee role changes. Assurance HR Management can assist you within defining new rates and the review process, having particular expertise within the interpreting of Awards and the development of well-rounded Employment Agreements and Position Descriptions.