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It may be an essential component of your business operations to have staff work on the weekends. However, if this is the case, there are a few things to keep in mind, particularly as it relates to their pay entitlements. The applicable award, enterprise agreement or employment contract will determine your employee’s entitlements to weekend pay. You should note that failure to pay your employees correctly will result in severe consequences. This article will help you better understand your role as an employer by taking you through the process of calculating weekend pay rates.

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Penalty Rates

Penalty rates refer to a higher rate of pay that some employees may receive to compensate them for working outside of standard business hours. This might include cases where employees work on:

  • weekends;
  • public holidays; or
  • late nights or early mornings (which is typical for shift workers).

The awards that apply to your employees will determine which penalty rates your employees can receive. Furthermore, each award provides different provisions for when penalty rates will apply. Where an employment contract or enterprise agreement covers an employee, the pay rate within these documents cannot be less than the relevant award’s pay rate. 

Weekend Pay Rates

Weekend penalty rates refer to the higher pay rates that employees who work on weekends may receive. You will find that the relevant award, enterprise agreement or employment contract will outline weekend pay rates for your employee. 

Although each modern award sets out different entitlements to penalty rates, there are common underlying trends for weekend pay across multiple awards. For example, many awards require employers to pay employees at least 150% (time and a half) of the regular base wage for work on a standard Saturday. In addition, it is common for employers to pay employees at least double (200%) of the regular base wage on a Sunday. 

Consider the Clerks—Private Sector Award 2020. Those covered by this award are entitled to 125% of the minimum hourly rate for ordinary hours worked on a Saturday. On a Sunday, these employees may receive pay at 200% of the minimum hourly rate for ordinary hours. Additionally, this entitlement includes no less than four hours’ pay.

Many businesses will have more than one award relevant that applies to them. If you need assistance finding the award that applies to your employees and their weekend pay entitlements, Fair Work Australia has a handy calculator available here. This calculator factors in the employee’s occupation, the sector they operate, the dates of weekends they may work and how many hours on those weekends.

Other Agreements

Not all employees will have an award that applies to them. Additionally, some employees will have agreements that cover them. You might wish to make an agreement as a substitute for the award. Although, Fair Work Australia will need to approve this. These alternative arrangements must demonstrate that the employee will be better off overall if this agreement covers them rather than the applicable award. This alternative agreement might be a:

  • individual flexibility agreement (IFA); or 
  • enterprise agreement (EA).

Regardless of whether an award covers an employee or not, you must always pay them in line with the minimum entitlements provided by the NES.

Failure to Pay Weekend Pay Rates

It is important to note that updates apply to employment awards every financial year. Therefore, you must check the awards that apply to your employees annually. Failure to comply with the relevant award may have serious consequences. 

The court may order penalties for you or your business if you fail to pay your employees correctly. The following maximum penalties are available for underpayment of wages (as at the time of writing):

  1. Penalties of up to $13.320 per contravention for an individual; or
  2. Penalties of up to $66,600 per contravention for a body corporate.

Furthermore, deliberately underpaying or failing to pay your employees is a criminal offence in certain states, potentially making you liable for a prison sentence. 

Key Takeaways 

Weekend penalty rates refer to the higher pay rates employees who work on the weekend may receive. Some key things to note about weekend pay rates include that:

  • weekend pay rates are a form of penalty rates;
  • the relevant award, enterprise agreement or employment contract will determine them;
  • failure to pay your employees the correct amount might result in severe civil or even criminal consequences.

Our experienced employment lawyers can assist as part of our LegalVision membership if you need assistance understanding penalty rates. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.

Frequently Asked Questions

What are penalty rates?

Penalty rates refer to higher rates of pay employees may receive to compensate them for working outside of standard business hours. This might include where employees work weekends, public holidays, late nights or early morning.

How are weekend pay rates calculated?

Weekend penalty rates refer to the higher pay rates employees who work on the weekend may receive. The relevant award, enterprise agreement or employment contract will usually outline weekend pay rates. However, where an employment contract or enterprise agreement covers an employee, the pay rate in these documents cannot be less than the pay rate within the relevant award. 

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