Penalty rate changes made simple

Small Business Development Corporation

05

SMALL BUSINESS BRIEFING

There are two industrial relations systems operating in WA. Generally, the state system applies to micro businesses, sole traders and unincorporated partnerships; while the federal system covers businesses such as ‘Pty Ltd’ companies. If you’re covered by the state industrial relations system, these rate changes don’t apply to you.

To check which system applies to your business visit Wageline or call 1300 655 266.

What are the changes?Changes to Sunday penalty rates in retail, hospitality and pharmacy awards will be rolled-in over the next three to four years with the following changes effective from 1 July 2017.

Award Employee statusPrevious loading

Loading from1 July 2017

Retail Full-time, part-time or casual 200% 195%

HospitalityFull-time or part-time 175% 170%

Casual No change

PharmacyFull-time or part-time 200% 195%

Casual 225% 220%

Fast foodFull-time or part-time — level 1 only 150% 145%

Casual (inclusive of casual loading) — level 1 only 175% 170%

On 5 June 2017, the Fair Work Commission announced the transitional arrangements for changes to penalty rates that will apply to a range of federal awards affecting Western Australian employees.

The following changes to public holiday penalty rates are also effective from 1 July 2017.

Award Employee statusPrevious loading

Loading from1 July 2017

Hospitality

Casual

275% 250%

Restaurant 250% 250%

Retail 275/250% 250%

Fast food 275% 250%

Pharmacy 275% 250%

All awards (as casual list above)

Full-time or part-time 250% 225%

See full details of the Fair Work Commission decision.

JUN17/009

SMALL BUSINESS BRIEFING

For more information about employing staff visit smallbusiness.wa.gov.au or call 133 140.

NOTE: THIS INFORMATION IS NOT A SUBSTITUTE FOR LEGAL ADVICE

What do I need to do?

If your business is covered under the federal system and you currently pay loading rates to eligible staff in place of penalty rates, you have a choice whether to change to Sunday penalty rates or continue with the loading. Check the terms of your contracts with full-time and part-time staff and keep in mind that new minimum wage levels also take effect from 1 July 2017. Don’t jump the gun, employers can only change loading rates in line with these transition plans. If you have any questions contact the Fair Work Commission.

Keep everyone informed

If you need to make changes to your employees’ rates of pay, discuss the issue with them as early as possible and be open and honest with your information. Maintaining clear lines of communication will help smooth the transition for your employees and your business.

The following charts show the timetable for implementing rate changes per industry:

Retail

Full-time and part-time employees

1 July 2017 200% to 195%

1 July 2018 195% to 180%

1 July 2019 180% to 165%

1 July 2020 162% to 150%

Casual employees (inclusive of casual loading)

1 July 2017 225% to 220%

1 July 2018 220% to 205%

1 July 2019 205% to 190%

1 July 2020 190% to 175%

Pharmacy

Hospitality

Full-time and part-time employees

1 July 2017 200% to 195%

1 July 2018 195% to 180%

1 July 2019 180% to 165%

1 July 2020 162% to 150%

Casual employees (inclusive of casual loading)

1 July 2017 225% to 220%

1 July 2018 220% to 205%

1 July 2019 205% to 190%

1 July 2020 190% to 175%

Full-time and part-time employees(no change to casual rates)

1 July 2017 175% to 170%

1 July 2018 170% to 160%

1 July 2019 160% to 150%