Penalty Rate Changes in the Retail Industry

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Table of Contents

• Who Do These Changes Apply To?
• What Are the Changes to Penalty Rates?
• When Are These Changes to Penalty Rates Being Rolled Out?
• What Steps Should I Take to Comply?
• Key Takeaways

If you are a business owner in the retail industry, you will be familiar with modern awards, including penalty rates. Every four years, the Fair Work Commission reviews and amends the award. In 2020, it increased the penalty rates for casuals and reduced them for permanent employees. It is crucial to comply with awards to avoid a claim for underpayment from employees or a penalty from the Fair Work Ombudsman. This article explains: 

• who these changes apply to;
• what the changes are; and
• practical steps employers should take.

Who Do These Changes Apply To?

These changes apply to employers and their employees who are captured by the General Retail Award 2020 (Award). The award applies if:

• you are an employer in the general retail industry; and
• your employee is captured by the classifications in Schedule A of the Award. For example, if their functions include the display, replenishing or presenting goods for sale, your employee may be considered a retail employee level 1. You’ll need to consider this for each employee.

The Award will not apply to you if you are captured by the: 

• Fast Food Industry Award 2010;
• Meat Industry Award 2020;
• Hair and Beauty Industry Award 2010; or
• Pharmacy Industry Award 2020. 

It also does not apply to employees who are covered by a modern enterprise award or an enterprise instrument.

If captured by the award, the changes apply to: 

• permanent full-time employees;
• part-time employees; and
• casual employees.

What Are the Changes to Penalty Rates?

The Fair Work Commission (FWC) has made amendments to the Award that saw initial changes come into effect on 1 March 2020, with further amendments being rolled out in October 2020 and again in 2021. These amendments will affect penalty rates payable to both casual and permanent employees. 

When Are These Changes to Penalty Rates Being Rolled Out?

To assist businesses with the introduction of these changes, the increase in penalty rates is gradual from 1 March 2020 to 1 March 2021 and as follows:

What Steps Should I Take to Comply?

To ensure you are compliant with these news, make sure that you:

• confirm whether your employees are captured by the Award.
• ensure you pay employees in satisfaction of their entitlements under the Award including these new penalty rates and with respect to the dates.
• put a note in your calendar to review and pay applicable penalty rates as they increase over time.

Key Takeaways

If you’re an employer in the retail industry and an employee is captured by a classification in the award, you’ll be captured by the General Retail Award 2020 – unless you fall within the exceptions. You should review employees’ penalty rates to progressively reduce Sunday loading and increase casuals’ evening and Saturday loading. The gradual increase and decrease of these rates can make the transition more complex so make sure you make a note in your calendar to review the rates at the relevant times. If you need help conducting award research or considering your new obligations under these awards, call LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.