July 1, 2019 marks the start of a new financial year and with it comes changes to minimum wages as set out in the Modern Awards as determined by the Fair Work Commission. Since 2017, there have also been changes to penalty rates that have significant implications for employers so let’s take a look at them.
Prior to 1 July 2017, many Modern Awards allowed for a loading of a significant percentage for hours worked on a Sunday by full-time, part-time and casual employees alike. Incremental decreases over the past three years have seen this loading reduced – for example full-time and part-time retail workers have dropped from a 200% loading to 165% this year with a further reduction in 2020 taking the loading down to 150%. Casuals under the retail award have had their loading drop from 200% on a Sunday to 175% this year where it will remain.
The timeline for the introduction of the changes to Sunday rates under these modern awards is as follows: (Source: Johnson Winter & Slattery)
As an employer, you will be more than aware that one of your largest expenses is your payroll and a reduction in penalty rates may provide your business the breathing space it requires to allow Sunday trading to become affordable, or even profitable. However, you may need to consider that reduced penalty rates may diminish the incentive for employees to forgo family time to work on a Sunday. Alternate days off during the week may appeal for some but for others that may not deliver the family balance many desire, so you may need to consider financial options that negate the penalty rate changes.
As previously covered, minimum rates for all Modern Awards have increased as of July 1. If you are still uncertain as to what you should be doing in relation to the Modern Award changes, contact the team at HR Staff n’ Stuff. We can also assist if you would like to consider paying above award rates ensuring you are covering all the legal requirements and meeting the better off overall test.
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