HSA June 21

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.
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
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