Avoid underpayment claims: This year’s award wage increases explained
Award rates and the national minimum wage increased by 2.4% from the first full pay period on or after 1 July 2016. Award allowances were also increased.
The relevant award for many caravan park staff is the Hospitality Industry (General) Award 2010 and the new rates range between $17.70 – $22.49 per hour (plus 25% loading for casual staff). Penalty rates also apply for overtime and weekend/public holiday work.
If you pay above award rates, you can absorb increases into your existing rates provided all employees are still paid above the minimum for their classification.
It’s important for caravan park owners to ensure you are paying the correct rates to all your staff, to avoid facing back-pay claims and penalties. Company directors and managers can also face personal fines for their involvement in the contravention. It only takes one disgruntled employee (or former employee) to make an enquiry or complaint, and back-pay claims can go back as far as six years.
The Fair Work Ombudsman (FWO) has broad powers to investigate underpayment claims, including requiring employers to produce time and wages records (for all employees, not just the person who made the complaint). The FWO also conducts spot checks, particularly in industries which employ a high number of casual staff, young workers and visa holders.
So, at the same time as making sure you are paying the correct rates, it’s also a good idea to check you are complying with other award conditions including laundry and other relevant allowances, overtime and penalty rates (including for weekends, public holiday work and when part time employees work above their normal hours), annual leave loading and meal/rest breaks.
Assessing award coverage and correctly classifying employees can be tricky (and costly if you get it wrong), so seek advice if you are unsure.
A number of caravan parks (of various sizes) have an enterprise agreement in place which contains ‘loaded’ rates (ie employees are paid a flat rate for all hours worked, and do not receive penalty rates, allowances, or leave loading). This can make it easier for employers from an administrative and cash flow perspective. Enterprise agreements will override the award, but before they can be approved the Fair Work Commission must be satisfies that employees will be ‘better off overall’ compared to the award. This means that the ‘loaded’ rate needs to be higher than the minimum award rate and factor in the amount of overtime the employees are likely to work, allowances that would otherwise be payable etc.
It is strongly recommended, especially where an enterprise agreement is not in place, that employers use written employment contracts or letters of offer that give them the ability to ‘offset’ any over award payments against any award entitlements, to provide some form of protection in the event of an underpayment claim.
The National Employment Standards are minimum legislative entitlements which cover both award and non-award employees, and can’t be overridden by an employment contract or enterprise agreement. They cover:
- Maximum weekly ordinary hours of work
- Annual leave
- Personal/carer’s leave (includes sick leave)
- Compassionate leave
- Long service leave
- Parental leave
- Community service leave (includes jury service and voluntary emergency management activities)
- Public holidays
- Notice of termination
- Redundancy pay (small businesses are exempt)
- Right to request flexible working arrangements
- Fair Work Information Statement (must be provided to all new employees)
If you are unsure about your obligations under awards of the National Employment Standards, would like help drafting or reviewing your employment contracts/letters of offer, or wish to learn whether an enterprise agreement could be beneficial to your business, please contact a member of the Rigby Cooke Lawyers Workplace Relations team. We can also answer any other employment related questions you may have.
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