Annualised Salaries – New Clause 24 Wording Confirmed
Further to the April edition of QHA Update, the new wording of Clause 24 (annualised wage arrangements) in the Hospitality Industry (General) Award 2020 (‘HIGA’) has been released.
A copy of the new clause, which will be in effect from 1 September 2022 can be viewed here.
What Does It Mean?
- For existing full time employees paid an annualised salary per clause 24, you will need to reissue a new letter of appointment closer to 1 September 2022 to ensure that it is compliant with the requirements of the new clause;
- Part time employees will no longer be able to be employed on a part time basis per clause 24 from 1 September 2022. Those existing employees will need to be issued with a new employment contract for part time employment.
That is Because….
The Fair Work Commission, in reviewing clause 24 decided, in relation to the HIGA, that:
- The outer limit for overtime hours shall be an average 12 per week hours that are in excess of ordinary hours;
- The outer limit for penalty rate hours shall be an average of 18 per week;
- The outer limit for penalty rates hours does not include 7:00 pm to midnight penalties;
- The changes will operate from 1 September 2022.
As a result, the 25% loading that was traditionally paid to annualise a salary is not necessarily going to be sufficient to cover the above; extra payments above the salary will be necessary in certain circumstances.
How QHA Will Help
The overall change arising from the new wording will be significant for members who rely on the annualised salary provision for non-managerial staff, and it will likely have financial implications and require adjustment to payroll systems. It will be important to stay on top of what it means for you.
The QHA’s Employment Relations team will prepare guidance material on how clause 24 will work, as well as tips and tricks for post 1 September 2022 salaried arrangements.
Members who subscribe to the HR Manual will automatically be sent a copy of an updated salary contract template. For those without the HR Manual, the template will be available for a nominal cost.
The template contract will be available from July 2022.
Clause 25 and Collective/Enterprise Agreements
Members are reminded that HIGA clause 25 will not be changing. The changes also do not impact annualisation clauses in existing Collective or Enterprise Agreements.
QHA members seeking more information or wishing to discuss a specific employment relations matter are encouraged to contact the Employment Relations Department for a confidential discussion by calling 07 3221 6999 or emailing email@example.com.