Closing Time for 2018: Penalty rates, employee turnovers, and other Australian labour trends

Monic Del Rosario

28 December 2018    |   

Another year of business has come and gone. The ever-changing landscape is continuously breeding innovations. FW penalty rates are rolling out and turnovers are still unstable. Need help gauging your business plan for the coming year? Here’s a quick look at the major factors in the Australian economy: Awards, Penalty Rates, and Wages • Changes in penalty rates for the retail industry were announced last month. Changes will roll out over the coming years, mostly affecting casual employees and weekend shifts. Other industries’ awards continued to roll out this year, some of which were hospitality, pharmacy, and fast food. • The Fair Work Ombudsman apprehended and/or penalised businesses for improper payroll processing and/or treatment of staff, resulting in underpayment of employees. This year’s reports amounted to over $10 million for probing into multiple businesses nationwide. • When it came to labour issues, five industries had the most number of issues. The industries are: fast food, restaurant, hospitality, transportation, or manufacturing.  Read more: Australian Penalty Rates: Retail Industry Update (Nov. 2018) Wage Growth and Employment Rates • Slow wage growth has continuously been affecting businesses and staff alike in 2018. Managers need to change this in order to reduce low-wage, low-quality jobs, and joblessness. The OECD Employment Outlook reports that the overall worsening of the wages in Australia is associated with decreased earnings of staff, which resulted in the rise of involuntary part-time unemployment. • The OECD also reported that 67% of Australia’s workforce is between the ages of 15-74. They indicated that the employment rate is expected to rise in the coming year. This counters the country’s 5.5% unemployment rate of 2018. • The DJSB conducted a study that suggests businesses use a digital and data ecosystem for streamlined operations. This is from seeking staff, to onboarding, and down to paying them. Several sources stated that incorrectly paying staff is one of the most common reasons why employees seek jobs elsewhere. • In terms of employee turnover, AI Group reports that Hospitality is still the industry with the most people changing jobs. Around 16% of the industry’s workforce changed employers/business in a span of 12 months; while Retail and Manufacturing reported a 7% turnover rate, and Healthcare at 5%. • Australia’s labour market remains diverse, with another study by the DJSB stating that the 3 largest-employing industries are Healthcare (13.4%), Retail (10.3%), and Construction (9.4%). Read more: Wage theft is on a roll: Sushi as a symbol of unpaid wages Automating Businesses in the Digital Economy • The Treasury recently published a discussion paper about the digitalised economy of Australia. Their report estimated that the GDP per person in Australia is around $5,000 higher, thanks to the digital economy. • The same report also mentioned The G20/OECD Base Erosion and Profit Shifting Project. They focused on improving tax frameworks by digitalising solutions. They also aim to increase ‘the capacity of businesses to have a significant market presence without being liable to taxation.’ • In an effort to kick off the BEPS project and to lessen breaches in wage laws, the Australian Taxation Office implemented last July the Single Touch Payroll, where businesses were required to use software that can send tax and super information directly to the ATO. • ASBFEO suggests that businesses move to using software for better management, especially when it comes to data, finance, and human resource management. Companies that use digital services to operate ‘save an average of around 10 hours a week’. They ‘subsequently increase annual revenue by almost a third’. Read more: Introducing Live Insights: Using real-time staffing to secure your business Digitalisation is becoming a part of economic policies. We can definitely expect a lot more trends and solutions to come up in the coming years. Technology has started to become an indispensable part of running a business and working out the never-ending wage and staffing problem are already being solved with specialised software as we speak. What other innovations do you predict will come this 2019?   Curious to know more about a workforce management system that can help your business get better this 2019? Book your FREE demo today.

Another year of business has come and gone. The ever-changing landscape is continuously breeding innovations. FW penalty rates are rolling out and turnovers are still unstable. Need help gauging your business plan for the coming year? Here’s a quick look at the major factors in the Australian economy:

Awards, Penalty Rates, and Wages

• Changes in penalty rates for the retail industry were announced last month. Changes will roll out over the coming years, mostly affecting casual employees and weekend shifts. Other industries’ awards continued to roll out this year, some of which were hospitality, pharmacy, and fast food.

• The Fair Work Ombudsman apprehended and/or penalised businesses for improper payroll processing and/or treatment of staff, resulting in underpayment of employees. This year’s reports amounted to over $10 million for probing into multiple businesses nationwide.

• When it came to labour issues, five industries had the most number of issues. The industries are: fast food, restaurant, hospitality, transportation, or manufacturing.

Read more: Australian Penalty Rates: Retail Industry Update (Nov. 2018)

Wage Growth and Employment Rates

• Slow wage growth has continuously been affecting businesses and staff alike in 2018. Managers need to change this in order to reduce low-wage, low-quality jobs, and joblessness. The OECD Employment Outlook reports that the overall worsening of the wages in Australia is associated with decreased earnings of staff, which resulted in the rise of involuntary part-time unemployment.

• The OECD also reported that 67% of Australia’s workforce is between the ages of 15-74. They indicated that the employment rate is expected to rise in the coming year. This counters the country’s 5.5% unemployment rate of 2018.

• The DJSB conducted a study that suggests businesses use a digital and data ecosystem for streamlined operations. This is from seeking staff, to onboarding, and down to paying them. Several sources stated that incorrectly paying staff is one of the most common reasons why employees seek jobs elsewhere.

• In terms of employee turnover, AI Group reports that Hospitality is still the industry with the most people changing jobs. Around 16% of the industry’s workforce changed employers/business in a span of 12 months; while Retail and Manufacturing reported a 7% turnover rate, and Healthcare at 5%.

• Australia’s labour market remains diverse, with another study by the DJSB stating that the 3 largest-employing industries are Healthcare (13.4%), Retail (10.3%), and Construction (9.4%).

Read more: Wage theft is on a roll: Sushi as a symbol of unpaid wages

Automating Businesses in the Digital Economy

• The Treasury recently published a discussion paper about the digitalised economy of Australia. Their report estimated that the GDP per person in Australia is around $5,000 higher, thanks to the digital economy.

• The same report also mentioned The G20/OECD Base Erosion and Profit Shifting Project. They focused on improving tax frameworks by digitalising solutions. They also aim to increase ‘the capacity of businesses to have a significant market presence without being liable to taxation.’

• In an effort to kick off the BEPS project and to lessen breaches in wage laws, the Australian Taxation Office implemented last July the Single Touch Payroll, where businesses were required to use software that can send tax and super information directly to the ATO.

Tanda-hospitality-software-payroll

• ASBFEO suggests that businesses move to using software for better management, especially when it comes to data, finance, and human resource management. Companies that use digital services to operate ‘save an average of around 10 hours a week’. They ‘subsequently increase annual revenue by almost a third’.

Read more: Introducing Live Insights: Using real-time staffing to secure your business

Digitalisation is becoming a part of economic policies. We can definitely expect a lot more trends and solutions to come up in the coming years. Technology has started to become an indispensable part of running a business and working out the never-ending wage and staffing problem are already being solved with specialised software as we speak. What other innovations do you predict will come this 2019?

 

Curious to know more about a workforce management system that can help your business get better this 2019? Book your FREE demo today.

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Awards & Rostering    |   

Easter Penalty Rates 2015 — What you need to know about paying staff

Easter is coming up soon, and that means two things! A new season of Game of Thrones to feast on, and – perhaps less excitingly – public holiday rates to pay staff. As a business owner, accountant, or bookkeeper, it’s important to be aware of how public holiday rates over Easter and ANZAC Day should be paid in your state. First, let’s see when the holidays will be in 2014. You might be surprised! If your business is open on any of these public holidays, you’ll need to pay staff the appropriate public holiday rates. You should check your award, which will tell you exactly what multiplier or penalties to apply, often under a Public Holidays section. A common multiplier is 2.5x. Some businesses pay staff salaries, or pay casually “above award”. Public holiday penalties still apply! If you have a contract, it should cover this – check with Fair Work if you are unsure. Staff who don’t work on a public holiday If you have full or part time staff who should have worked on any of the weekday public holidays – Good Friday, Easter Monday, and Easter Tuesday in specific cases – they are still entitled to pay, even if they do not work. Generally you’ll pay at base rate for the hours staff would have been entitled to. Of course, if staff do work on the day, you’ll pay at a higher rate as dictated by the award (see above). But keep in mind: this only applies if they usually work on that day. For example, a part timer in Queensland who generally works Tuesday to Thursday probably wouldn’t get paid the public holidays because there’s no public holiday on those weekdays. Check your award/agreement to be sure! If your award dictates how rostered days off work, you should check to see if staff with an RDO on a public holiday are still paid. In some states, some kinds of businesses are not permitted to open on public holidays due to trading regulations. If this applies, you will probably still be required to pay staff who would otherwise work on that weekday. Again, if you’re not sure, it’s best to ask. Staff who work on a day that isn’t a public holiday Keep in mind that the rest of the award doesn’t shut off just because it’s Easter. For example, if you are in Tasmania and pay Saturday rates, you’ll still need to pay these on Easter Saturday (which is not a public holiday for you). Did you know… If an employee takes sick leave around a public holiday (eg. Thursday April 24 to Monday April 28), they still get paid the public holiday if they were otherwise supposed to work that day (ie. full/part time) If an employee takes annual leave, public holidays during the leave period don’t count towards their annual leave balance Public holidays do not need to be paid for staff on unpaid leave Staff cannot be forced to work on a public holiday if they have reasonable grounds for doing so. Common reasons include: the amount of notice given, family responsibilities (especially over Easter), and whether one could reasonably expect the business to be open on a public holiday. Tanda’s employee time clocks automatically interpret industry awards – including public holidays – so you can be sure you paid staff right, without tedious manually data entry Add the Fair Work Infoline to your speed dial, they are always happy to help. The number to call for any payroll queries is 131 394. Note: none of the above constitutes formal payroll advice. Always check with your accountant, bookkeeper, or Fair Work.

Awards & Rostering    |   

Sunday Penalty Rates: What’s really happening?

The national debate on penalty rates is quickly shaping up to become a defining issue of the Turnbull government and the next Federal election. The debate on penalty rates cuts straight to the bone of modern political disagreement and draws a line straight down one of the most fundamental differentiators of right wing vs. left wing economics. One side of the debate (the left) believes that the Government should regulate labour markets to ensure that the most vulnerable workers in our society are protected against greedy employers, and this will lead to a long term more equitable society. The other side of the debate (the right) believes the best path is to trust the power of the market to set labour rates, the argument is that the hardest workers will naturally attract the highest pay rates and encourage the labour force as a whole to be more productive. At a more practical level, the debate in Australia is concentrated on what to do about Sunday penalty rates which are paid at double time in some industries and whether to reduce those rates to be the same as Saturday rates. There are many institutional, practical and political factors at play which we will try to summarise in this article. Arguments for reducing Sunday penalty rates The argument goes that a reduction in cost of employment on Sundays will simultaneously lift productivity and improve unemployment rates in Australia. Many businesses remain closed on Sunday, because opening is unprofitable. Advocates of the rate cut argue that although some employees would see less money in their take-home pay packet, the overall result will be lower unemployment; not only because more business will trade on Sunday, but because many businesses will choose to increase their service levels (by employing more people) when margins aren’t quite so slim. Arguments against reducing Sunday penalty rates This side of the debate worries that reducing penalty rates will be hurting those in society who need the money the most and should be rewarded at higher rates due to working more ‘unsociable’ hours. Those against penalty rate cuts are generally very sceptical that business owners will create more jobs through the pay rate cuts, and see the proposed cut as a transfer of money from employee’s back-pockets into business owners’ wallets. What about the politics? Not too long ago, specific pay rates for industries were regulated at a State, rather than a Federal level. The move to shift powers of overall rate-setting to the confines of Canberra means that this debate is now being played out on the national stage. The problem for Turnbull and the Coalition is their track-record on labour market reform. As soon as the debate shifts to penalty rates, Turnbull runs the risk of resurfacing some of the toxic politics from the WorkChoices legislation. The problem for the Labour party and particularly Shorten, is how much this fight relies on support from the Union movement. As the political mudslinging begins, this could prove to be particularly bad timing for Shorten following the damning finding of the Royal Commission into Unions. All of this is mixed in with an unpredictable cross-bench, who Turnbull will need to win the support of to push through any change. There is far more at play for both sides than the practical changes to paychecks on Sunday. For both sides this argument flares deeply held ideological principles and is seen as a skirmish on the much larger war on our nation’s attitude towards labour laws, the free-market and the role of government. Get ready for the s**tfight.   At Tanda, our Award Interpretation software helps businesses ensure they are paying their staff correct penalty rates at different times throughout the week.

Awards & Rostering    |   

Penalty Rates Decision: Sunday and Public Holiday Penalty Rates to be cut

Fair Work Penalty Rates Decision Source: The Fair Work Commission The Fair Work Commission has today announced that Sunday and Public Holiday penalty rates are to be cut across Hospitality, Retail, and Fast Food Awards, while Saturday penalty rates are to remain the same. Changes to Sunday Penalty Rates Sunday penalty rates for full time and part time hospitality workers will be reduced from 175% to 150%, rates for casuals will remain the same at 175%. Level 1 Employees under the Fast Food Award will see a reduction in Sunday penalty rates from 150% to 125% for full-time and part-time employees. Casuals will have a reduction from 175% to 150%. No changes will be made to Sunday penalty rates for Level 2 and Level 3 Employees under the Award. Full time and part-time retail workers will have Sunday penalty rates reduced from 200% to 150%. Casual Sunday rates for retail will also be reduced from 200% to 175%. Changes to Public Holiday Penalty Rates Public holiday rates for full-time workers in hospitality will be reduced from 250% to 225%, with no change for casual Public Holiday penalty rates. Changes to Public Holiday rates will come into effect July 1, 2017. However, The Commission has stated that the immediate implementation of updated Sunday penalty rates would create undue financial distress for Sunday workers. As such transitional arrangements for Sunday penalty rate changes will be made in the coming months. The decision was handed down after more than eight months of deliberation, and comes after The Productivity Commission recommended bringing Sunday penalty rates into line with Saturday rates in 2015. This is the biggest Industrial Relations decision The Fair Work Commission has made in recent years. It is hoped that reducing penalty rates will bring  about more ‘positive employment effects’ for businesses, and will “lead to increased trading hours, an increase in the level and range of services offered on Sundays and Public Holidays and an increase in overall hours worked.” With the outcome of the decision expected to come into play later this year, it is crucial that business owners have the correct tools and processes in place to update changes to wage rates correctly, and better manage their labour costs to capitalise on the penalty rate reductions.

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About the author

Monic Del Rosario

Monic is Tanda's content curator. She uses her background in Development Studies to create materials that are both business-oriented and human-centric.

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Awards & Rostering

Easter Penalty Rates 2015 — What you need to know about paying staff

Easter is coming up soon, and that means two things! A new season of Game of Thrones to feast on, and – perhaps less excitingly – public holiday rates to pay staff. As a business owner, accountant, or bookkeeper, it’s important to be aware of how public holiday rates over Easter and ANZAC Day should […]

Awards & Rostering

Sunday Penalty Rates: What’s really happening?

The national debate on penalty rates is quickly shaping up to become a defining issue of the Turnbull government and the next Federal election. The debate on penalty rates cuts straight to the bone of modern political disagreement and draws a line straight down one of the most fundamental differentiators of right wing vs. left […]

Awards & Rostering

Penalty Rates Decision: Sunday and Public Holiday Penalty Rates to be cut

Fair Work Penalty Rates Decision Source: The Fair Work Commission The Fair Work Commission has today announced that Sunday and Public Holiday penalty rates are to be cut across Hospitality, Retail, and Fast Food Awards, while Saturday penalty rates are to remain the same. Changes to Sunday Penalty Rates Sunday penalty rates for full time […]

More Resources

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