From 1 November 2018, penalty rates were increased for casual employees covered by the General Retail Industry Award 2010 (Award). In order to soften the impact for employers, the increase in November last year was just one step in a phased increase to the full penalty rate increase.
Penalty rates for casual employees will increase as follows:
|Commencement date||Saturday casual penalty||Total addition to base rate (Saturday penalty + 25% casual loading)|
|1 October 2019||20%||45%|
|1 March 2020||25%||50%|
Evening work (Monday to Friday hours after 6pm)
|Commencement date||Evening work casual penalty (Monday to Friday)||Total addition to base rate (evening penalty + 25% casual loading)|
|1 October 2019||10%||35%|
|1 March 2020||15%||40%|
|1 October 2020||20%||45%|
|1 March 2021||25%||50%|
The Saturday penalty increase applies to all hours worked on a Saturday, whilst the evening penalty applies only to hours worked after 6pm.
These changes apply to casual employees only. Saturday and evening penalty rates for permanent employees (full time and part time) remain unchanged.
Alongside the penalty increases for casual retail employees, the FWC introduced a gradual reduction to the Sunday penalty rates for shift workers (from 195% -175% for permanent shift workers and from 220% to 200% for casual shift workers). The first two stages in this reduction took effect in November 2018 and July 2019, and will be further reduced in the final stage to 200% as of 1 July 2020. In addition, Sunday penalty rates for non-shift workers continue to be reduced annually in July each year, with the final reduction taking effect from 1 July 2020.
What should you do?
From the first full pay period on or after 1 October 2019, employers operating in the retail industry must ensure they are paying all Award-covered casual staff the correct Saturday and evening penalty rates, particularly bearing in mind the coming Christmas retailing season.
- Carefully review their wage arrangements and plan to implement the necessary penalty increases (or decrease, in the case of shift workers) from the first full pay period on or after 1 October 2019;
- Diarise to review the rates again next year prior to the next phase of the transitional arrangements taking effect in March 2020; and
- In the case of employers already paying above-award rates to casual staff, review these arrangements to ensure the payments remain high enough to accommodate the penalty increases.