FWC changes to penalty rates and minimum wages

28 June, 2017 by
Annabelle Cloros

Changes to penalty rates will come into effect from 1 July 2017 after the Fair Work Commission’s (FWC) announcement earlier this year.

Penalty changes for public holidays, evenings and after midnight will apply in full from 1 July 2017, but alterations to Sunday rates will be phased in over a three- to four-year period starting from the same date.

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The cuts concern the Fast Food Industry Award 2010 [MA000003] (the Fast Food Award); the Restaurant Industry Award 2010 [MA000119] (the Restaurant Award); and the Hospitality Industry (General) Award 2010 [MA000009] (the Hospitality Award).

Sunday penalty rates for the Fast Food Award will decrease for Level 1 employees from 150 percent to 125 percent for full-time and part-time employees and 175 percent to 150 percent for casuals. Public holiday rates will change from 250 percent to 225 percent for full-time and part-time employees and 275 percent to 250 percent for casuals.

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The 10 percent evening work penalty will start one hour later from 10:00pm until midnight and the 15 percent after-midnight penalty will cover hours worked from midnight to 6:00am.

The Restaurant Award’s public holiday penalty rates will also move to 225 percent, but the casual public holiday penalty will remain unchanged at 250 percent. The 15 percent after-midnight penalty will apply between midnight and 6:00am, rather than 7:00am.

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For the Hospitality Award, Sunday penalty rates plummet from 175 percent to 150 percent for full-time and part-time employees. But the Sunday penalty for casual workers will remain at 175 percent. Public holiday rates will drop to 225 percent for full-time and part-time employees and 250 percent for casuals, in line with the aforementioned Awards.

But it’s not all bad news for industry, with the FWC announcing an increase in minimum wages by 3.3 percent in the 2017 Annual Wage Review.

The increase kicks in 1 July 2017, taking the new national minimum wage to $694.90 per week or $18.29 per hour. The increase applies to employees who get their pay rates from the national minimum wage or a modern award.

The FWC is in the process of issuing draft determinations and orders in regards to how the decision affects modern awards, and will update the pay rates in each award in due course.