Exemption Rates Proposed for Restaurant Industry Award

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What has been proposed?

Late last week the Fair Work Commission issued a provisional view that it will insert an exemption rate clause into the Restaurant Industry Award. If the clause is added to the Award, employers will be able to pay employees under the Award a flat rate and be exempt from paying overtime, penalty rates and allowances.

How would it work?

The clause would allow employers to pay employees a flat rate that is at least 170% of the award rate and be exempt from paying overtime, penalty rates and allowances for all hours worked, up to and including 57 hours per week.

For hours worked in excess of 57 in a week the employee must be paid:

• 150% of the Exemption Rate for the first two hours in excess of 57 in the week; and then

• 200% of the Exemption Rate thereafter in the week.

The clause will apply to Level 5 and Level 6 full-time employees excluding those in the administrative and general stream.

Where an agreement to pay the exemption rate is made, the following clauses of the Award shall not apply:

• clauses 16.5 and 16.6 (meal break);

• clause 21 (allowances);

• clause 23 (overtime rates) not including clause 23.2; and

• clause 24 (penalty rates).

The exemption rate shall be the rate for the purposes of calculating:

• personal leave; and

• annual leave.

What are the benefits?

Award compliance can be difficult for many small business owners. Exemption rates will make Award compliance easier and generally do not come with the burden of excessive time keeping obligations that come with annualised salary provisions.

When will we know?

It is unclear at this stage when a final decision will be made on the addition of the clause. Infinity HR will provide updates as more information comes to light.

Want to know more? Contact the Infinity HR team for a discussion at 0400 489 743 or email info@infinityhr.com.au today.