Under the changes retailers and restaurants will be required to pay around 25 per cent more in overtime per hour to casual employees from the first full-pay period of 2018.
Businesses operating under the Retail Award will be required to pay adult casual employees 175 per cent of the base hourly award rate for the first three hours worked in excess of nine hours in one day, up from 150 per cent.
Retailers will then be required to pay casual employees 225 per cent of the base hourly rate for hours worked after that, while overtime will also increase to 225 per cent on Sundays and to 275 per cent on public holidays. Under the Retail Award the rate of overtime for full-time and part-time employees on Sunday is 200 per cent and is 250 per cent on public holidays.
Overtime rates under the Fast Food Award have also increased from 150 per cent to 175 per cent for the first two overtime hours after employees have worked 11 hours in one day, increasing to 225 per cent for each hour after that. The changes are part of a broader range of award reforms that were initiated last July under the four-yearly modern award reviews.
Australian Retailers Association executive director Russell Zimmerman advised retailers to ensure they were paying employees the correct amount under the award to avoid potential penalties, but also lamented the pressure increasing overtime will have on small-to-medium businesses.
“We’re getting to a point whereby if we keep hitting SME retailers we’ll price employment out of proportion,” he said. “Smaller retailers will use a larger pool of employees and all of them will get less hours.”