Tuesday, 13 June 2017

Restaurant Industry: How the 2017 Penalty Rates Decision Will Affect Your Business

Penalty Rates

On 23 February 2017, the Fair Work Commission handed down its historic decision to reduce Sunday penalty rates and public holiday rates in some of the retail and hospitality related modern awards. The Restaurant Industry Award 2010 will be affected by the change.

While there is no change to Sunday penalty rates under the Restaurant Award, the Fair Work Commission made changes to public holiday penalty rates for permanent (full time and part time) employees and early morning penalty rates for all employees.

Public Holiday Penalty Rates

The public holiday penalty rates for full time and part time employees will be reduced on 1 July 2017 as follows:

Full-time and part-time employees

1 July 2017 250% to 225%

There is no change to public holiday penalty rates for casual employees, which remains at 250% (including casual loading).

Early Morning Penalty Rates

The Fair Work Commission has also made changes to after midnight penalties. From 1 July 2017, the span of hours which attracts the 15% loading will apply to work performed between midnight and 6am (rather than 7am) to align with the span of hours in the Fast Food Award.

Minimum Wages

In addition to setting the transitional arrangements for penalty rates last week, the Fair Work Commission also announced its decision to increase the national minimum wage and minimum award wages by 3.3%. The increases will take effect from the first full pay period after 1 July 2017 to coincide with the reduction in penalty rates so that affected employees will receive an increase in their base hourly rate of pay at the same time as they are affected by a reduction in weekend penalty rates.

While the Commission is yet to release updated minimum wage rates for affected modern awards, we expect that the new minimum wages in the Restaurant Award from 1 Juy 2017 will be as follows:

Classification Weekly Wage
Introductory $694.90
Level 1 $714.90
Level 2 $742.30
Level 3 $767.80
Level 4 $809.10
Level 5 $859.80
Level 6 $882.80

If you have any questions regarding your minimum pay obligations or penalty rates, do not hesitate to contact HR Legal.


This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.