What are they?

On the 5th May 2022, the Fair Work Commission (FWC) reached a decision on reviewing annualised salary provisions in modern awards. As a result, we will update two awards, the Hospitality Industry (General) Award 2020 and the Restaurant Industry Award 2020. From the 1st September 2022, it will include new rules for what you can include in an annualised wage arrangement and how employers need to document and record their agreements.

An annualised wage arrangement is an agreement that enables employers to pay a full-time employee a fixed, regular wage each pay period despite‌ working varying hours from week to week. You must enter into an arrangement in writing with the agreement of both the employer and employee. Annualised wage agreements are not new to the Restaurant and Hospitality Awards, but a lot of new conditions where added for employees who are on this arrangement.

Who and what is included?

It is important to note that the new changes do not apply to employees who are paid as Managerial Staff (Hotels) under the Hospitality award. Key updates include the annualised wage arrangement:

Must be at least 25% more than the minimum wage.
Can include any or all of the following:
- Minimum rates.
- Allowances (Hospitality Industry (General) Award 2020).‍
- Split-shift allowances (Restaurant Industry Award 2020).‍
- Overtime.
- Penalty rates.
- Payment for annual leave loading (Hospitality Industry (General) Award 2020).‍
- Payment for annual leave (Restaurant Industry Award 2020).
- Additional public holiday arrangements (Hospitality Industry (General) Award 2020) .
Covers a maximum of:
- Eighteen penalty hours per week (excluding hours worked between 7:00pm to midnight).
- 12 overtime hours per week.
Hours that exceed the maximum penalty and/or overtime hours per week are termed Outer Limit Hours and you must pay at the relevant award rate applicable in addition to the employees regular salary.
Must specify the annualised wage amount, which provisions are included, and the number of hours that will attract overtime or penalty rates.
Can be terminated at any time; if both parties agree, otherwise; either the employer or employee must give 12 months’ notice of termination in writing.
Must be reviewed annually from commencement of agreement to make sure the employee is not underpaid.

Annual wage review 2022

As part of the Annual Wage Review 2021–22, most awards had minimum wage increases come into effect from the 1st July 2022. However, the Hospitality Industry (General) Award 2020 and the Restaurant Industry Award 2020 were delayed. These awards and several others, will see an increase from the 1st October 2022. The following ten awards will see a delayed increase from the 1st of October 2022:

Aviation

Aircraft Cabin Crew Award 2020.
Airline Operations – Ground Staff Award 2020.
Air Pilots Award 2020.
Airport Employees Award 2020.
Airservices Australia Enterprise Award 2016.

Hospitality

Hospitality Industry (General) Award 2020.
Registered and Licenced Clubs Award 2020.
Restaurant Industry Award 2020.

Tourism

Marine Tourism and Charter Vessels Award 2020.
Alpine Resorts Award 2020.

How do I manage them?

To adhere to these new changes and help lessen the administrative burden for employers, we have introduced new rulesets, pay categories, pay rate templates, and employment agreements to accommodate employees paid under the new annualised wage arrangements.

Pay employees an annualised wage of 38 hours per week unless an unpaid leave request has been made.
Pay any additional Outer Limit Hours where the employee:
Works more than an average of 18 ordinary hours, which would attract a penalty rate under clause 29.2(a) of the award per week, excluding hours worked between 7.00pm to midnight
Works more than an average of 12 overtime hours per week in excess of ordinary hours
These additional Outer Limit hours will be paid at the relevant penalty or overtime rates; however, these rates are based on the minimum award base rate for their classification rather than their annualised wage rate.