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FWC introduces loaded rates into the Hospitality Award
On 3 September 2021 the Fair Work Commission introduced loaded pay arrangements into the Hospitality Industry (General) Award 2020. These arrangements allow employers to pay certain employees a higher base rate of pay in lieu of employees receiving payment for overtime, penalty rates and the split shift allowance. The change was brought about after a submission to the Fair Work Commission from the Australian Hotels Association, who claimed that it would simplify Award compliance for employers.
What are the rates and who can be covered?
There are 6 tiers of loaded rates that range between 110.20% and 131.05% of an employee’s ordinary hourly rate. The rates vary depending on how many days of the week the rates apply to, which can be Mon-Fri, Mon-Sat or Mon-Sun, and the maximum amount of weekly hours an employee can work under the arrangement which can be either 40 or 45 hours per week.
It is important to note that the loaded rates can only be applied to employees who are full-time, over the age of 21, are level 3 or above in the Award, not receiving supported wage rates, and do not work on a roster with an RDO.
At this stage employers do not need an employee’s agreement to institute a loaded pay arrangement, however they must give employees at least 7 days notice of their intention to introduce the change. Arrangements must be made in writing and in accordance with Schedule L of the Award which you can view here.
The loaded rate does not mean that employees have no entitlement to overtime, penalty rates or allowances. It just limits the circumstances where they will be payable.
The following list contains the parameters for a loaded rate and all time worked outside ranges specified or scope of the arrangement will still attract overtime/penalty rates:
- Monday to Friday: a maximum of 11.5 hours (excluding meal breaks) per day / shift rostered between 7:00am and 12:00am (midnight);
- Saturday: a maximum of 10 hours (excluding meal breaks);
- Sunday: a maximum of 10 hours (excluding meal breaks); and
- if the period between shifts is 3 hours or less, a split shift allowance must be paid
Additionally public holidays payments are excluded from these arrangements and must be paid per the Award.
If you have any queries, please contact us on 0421 592 541 or at firstname.lastname@example.org.
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