New overtime penalty rates come into force

New overtime penalty rates come into force

An employment relations adviser is warning SMEs about “yet another financial burden” about to come into force.

According to Andrew Spiteri of Employsure, changes to 11 Modern Awards take effect in the from the first full pay period from 1 January 2018, which he labelled as “yet another financial burden on industries [already] running on thin margins.”

Those industries to be impacted include restaurants, fast food operators, retailers, hospitality providers, hair and beauty services as well as social and community care providers.

“These industries have been targeted all year with Award changes and are about to see another wave – at the busiest time of the year,” Mr Spiteri said.

“We speak to thousands of small business owners every week who would like to see government stop making frequent changes to overtime penalty rates and get serious about supporting small business.”

Mr Spiteri noted the latest changes are as follows:

  • Fast Food Award: for shifts of more than 11 hours in one day, overtime will be paid at 175 per cent for the first two overtime hours and 225 per cent thereafter, and 225 per cent on Sundays.
  • Retail Award: for shifts of more than nine hours in one day, overtime will be 175 per cent for the first three overtime hours and 225 per cent thereafter, while on Sundays it will be 225 per cent and jump even higher to 275 per cent on public holidays.
  • Hair and Beauty Award: for shifts of more than 10.5 hours in any one day, overtime will be 175 per cent for the first three hours and 225 thereafter, regardless of which day is worked.

The move is likely to see more businesses reduce the length of shifts to avoid paying overtime, and instead divvy work among a higher pool of workers at cheaper standard rates – in turn putting pressure on rostering.

In light of these changes, SMEs using awards to pay staff are encouraged to check and see if they will be impacted – and if so, to plan ahead.

“It’s so important to be across these changes and check if the new rates apply to your business,” said Mr Spiteri.

“Get the right advice to avoid paying the expensive price of getting it wrong.”

New overtime penalty rates come into force
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