Restaurant & Catering Australia (R&CA) says the Fair Work Commission (FWC) decision to increase the minimum wage by 3.3 percent will put growth in the hospitality sector at risk.

As a result of the decision, the national minimum wage will increase to $694.90 per week, or $18.29 per hour as of 1 July 2017. R&CA argued that a 2.4 percent increase was sufficient for both this year and last year’s Annual Wage Review.

According to the ABC, the rise is more than double the increase most employer groups wanted, but considerably less than the $45 a week rise that unions were pushing for.

R&CA CEO John Hart said that that increases in the minimum wage will have a disproportionate impact on service-based businesses such as those within the hospitality sector.

“The already exorbitant cost of wages is one of the biggest reasons why these businesses choose not to hire more staff.

“This year’s minimum wage increase, on top of last year’s increase, will put at risk the 84,300 jobs that the sector is expected to generate by 2020,” Hart said.

Hart also said the persistent growth in the minimum wage was not sustainable for businesses in the café, restaurant and catering sector and would lead to businesses choosing to hire fewer staff.

“These businesses are already operating on incredibly thin profit margins and a 3.3 percent increase in the minimum wage will give small business operators no choice but to cut back on staff,” Hart said.

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