Last month, the Fair Work Commission made changes to the annualised wage and salary arrangement clauses in both the Hospitality and Restaurant Awards. What does it mean for your business? Let’s take a closer look… 

What are annualised wage arrangements? 

As well as being a mouthful, an annualised wage arrangement lets you pay your full-time staff a regular amount every pay period (more than the minimum award rate and with various entitlements) – even when their hours fluctuate. 

There are some rules around this, to make sure staff benefit from the arrangement. For instance, you need to pay each employee at least 25% more than their weekly minimum award rate, multiplied by 52. 

What does it include? 

Your annualised wage agreement can cover fixed regular pay for: 

• Minimum award rates for each employee’s classification level 
• Split shift allowances 
• Overtime 
• Penalty rates 
• Annual leave loading 
• Extra public holiday arrangements (for the Hospitality Award) 

Since these things are included in the agreement, you typically won’t need to calculate them every pay period. 

What are the changes? 

From 1 September 2022, the Fair Work Ombudsman (FWO) tightened the rules around annualised wage arrangements. This was done in an effort to stamp out wage theft, as well as improve employer compliance in the hospitality and restaurant sectors. 

Here’s what changed: 

• Entitlements: Only the entitlements we mentioned earlier can fall under an annualised wage agreement – with anything else paid separately. 
• Outer limits: There’s now a limit on how many hours that attract overtime (an average of 12 hours a week) or penalty rates (an average of 18 hours a week) can be included in an employee’s annualised wage – with any extra hours paid separately. 
• Inclusions: Each agreement must include the annualised wage amount, award entitlements, and outer limits. 
• Record keeping: You’ll need to keep accurate record of when employees start and finish work, and take unpaid meal breaks – and you must sign off on these every roster cycle. 
• Ending an agreement: This can be done if either party gives 12 months’ notice in writing – or earlier if both agree. 

You can find out more about the changes on the Fair Work website. 

How to navigate the changes 

Keeping on top of modern awards can seem like a full-time job in itself! But there are some things you can do to budget wages more accurately and stay compliant.  

The easiest is to have us set up your specific awards within Wageloch. That way, you can be sure your staff are being paid correctly. 

Plus, built-in BOOT (‘better off overall test’) reporting means you can see the difference between paying a full-time employee with overtime versus paying them a salary. 

On top of all that, using the Sales/Budgets screens in Wageloch makes it easy to manage and minimise your labour costs. 

With more accurate reporting and other handy features, you can feel confident you’re maximising wage savings – and doing the right thing by both your business and your staff. 

To see how we can help navigate your awards, book a demo with our friendly Australian team today.