Every 4 years, the Fair Work Commission (FWC) is required to conduct a review of modern awards. This round of changes affecting the Restaurant Industry Award and the Hospitality Industry (General) Award includes the need for employers who currently pay annualised salaries must comply with new notification, record-keeping and reconciliation requirements.
Following on from the well-publicised “wage theft stories” from inside and outside the world of hospo; has raised the suitability of annualised salary arrangements under modern awards, and whether they are effective in providing a fair and relevant minimum safety net of terms and conditions for employees. This is leading to the review FWC around annualised salary arrangements.
The following tricky-to-manage clauses will be added to the current annualised salary clauses already in the Restaurant Industry Award and the Hospitality Industry (General) Award and others:
- Employers must notify employees in writing of the annualised salary payable to them, the clauses of the modern award that will be satisfied by the annualised salary and how the annualised salary has been calculated. They will also need to specify the “outer limit” of ordinary hours that would attract penalties or overtime the employee may be required to work in a pay period or roster cycle without being entitled to additional pay.
- Any hours worked in excess of the “outer limit” by an employee paid by way of an annualised salary must be paid separately to the annualised salary as overtime or with the relevant penalty rates.
- Employers must undertake an annual reconciliation each 12 months from commencement of the annualised salary arrangement to ensure that the salary is equal to or more than the amount that would have been payable to the employee if they were paid strictly in accordance with the modern award. Any shortfalls must be paid to the employee within 14 days.
- Employers must keep a detailed record of the employee’s start and finish time, including any unpaid breaks. This record must be signed by the employee or acknowledged in writing as a correct and accurate record during each pay or roster cycle.
- The Hospitality Industry (General) Award now includes a definition for an accrued day off (ADO). ADO’s (as distinct from RDO’s) are paid days off, which accumulate by working extra hours. Full-time employees can accumulate an ADO over a 4-week roster period, if the employer agrees to it. There are rules about how and when an employee can take an ADO.
- If employees are owed a day off for working on a public holiday, they can now agree to take it up to 6 months later. Previously, they had to take it within 28 days arrangement by giving 12 months’ written notice.
More information about the Hospitality Award can be found here. Read the Fair Work Commission’s determination to see the full list of changes. The Fair Work Commission will determine final drafting in the next few weeks. We’ll keep you posted!
Employers, revisit your pay rates – pay the minimum wage or more than the minimum wage. Employees, know your rights and stay abreast with news and updates on your rights.