AHA|SA MEMBER INFORMATION
Don’t Get Caught Out – Getting it Right With Salary Arrangements OWEN WEBB - AHA|SA WORKPLACE RELATIONS MANAGER
There are many benefits associated with an employee and employer entering into a salary arrangement, however it is important to ensure that employees enter into the correct salary arrangement and that they are classified and remunerated appropriately. In this article we examine the salary arrangements under the Hospitality Industry (General) Award 2020 (‘HIGA’), including how to calculate the appropriate salary level and how to determine which positions fall under which arrangement to avoid any potential backpay or underpayment claim. ANNUALISED SALARY ARRANGEMENTS (CLAUSE 24) Coverage The HIGA contains annualised salary provisions under Clause 24. Clause 24 applies to all employees other than casual employees and employees within the Managerial Staff (Hotels) classification level. An individual employee and their employer may agree on the payment of an annualised salary pursuant to Clause 24, however such an arrangement needs to be mutually agreed between the employer and the employee, it cannot be forced upon the employee. Annualised salary arrangements are suitable for any positions that fall within the classification levels 1 to 6 in Schedule A – Classification Structure and Definitions of the HIGA. For example, the annualised salary arrangement would be suitable for a Food and Beverage Attendant Grade 3 (wage level 3) position. 20 | Hotel SA | W W W . A H A S A . A S N . A U
Salary When determining the appropriate salary to pay an employee under an annualised salary arrangement, the first consideration for the employer is to ensure that the employee is paid at least 125% of the minimum weekly rate that would otherwise be applicable under Table 3-Minimum rates in the HIGA over the year. For example, the minimum weekly rate for a full-time employee at the level 3 Food and Beverage Attendant classification (as at 1 June 2021) is $832.80. If we add an additional 25%, the minimum salary that would be payable for the level 3 classification would be $54,132 gross per annum ($832.80 x 52 weeks + 25%). The annualised salary satisfies the requirements of the HIGA under clause 28-Overtime and Clause 29-Penalty rates. However, the second consideration for the employer is to ensure that the annualised salary does not result in an employee being paid less over a year (or, if the employee’s employment is terminated before a year is completed, over the period of that employment) than would have been the case if an annualised salary had not been agreed and the employee had instead been paid their weekly rate and any other amounts satisfied by the annualised salary. So for an employer it is one thing to pay 125% of the minimum weekly rate, but that does not mean the employer can simply roster the employee for as many hours as they like, because the employer still has to ensure that the employee is no worse off under their salary arrangement than what they would otherwise be as a full-time or part-time employee under an hourly Back to Contents
