Penalty rates are a percentage increase in an employee’s hourly rate on account of them working late, on weekends or on public holidays.
Penalty rates come either from awards or agreements.
- If they’re in an agreement (whether an employment agreement or an enterprise agreement), it means you agreed to put them in. You should probably know them.
- If they’re in an award, the first step is to find the relevant award. In the next few Small Plates, we’ll touch on the relevant award for each hospitality business.
Overtime rates are similar to penalty rates. Overtime rates apply where more hours are worked, rather than any work during those penalty rate periods.
Penalty rates’ origins are in deterring employers for requiring their employees to work during those times in those industries where. Deterrence through penalising the employer – hence the name.
Next Small Plate, we’ll look at what happens if you’re not paying penalty rates to your staff.