Pay rates for hospitality employees have made headlines over the last month with celebrity chef George Calombaris fined for underpaying staff by almost $8 million. In most of the media publications that reported on this, one theme was common – getting staff pay right in the hospitality industry is complex. Pay surrounding the hospitality industry has a lot more moving parts than many other industries – you are dealing with overtime rates, penalty rates and much more on a regular basis.
If staff pay is so complex in the hospitality industry, why are businesses not always using experts in payroll to manage the process? Historically, payroll is one of those areas which we pass onto a junior staff member or family member to take care of. Hospitality businesses need to stop doing this. They need to make sure they are on top of the legislation relating to hospitality pay and conditions and engage help where required. To use a well-known quote, “if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur”. The question “how much should I pay my staff” is so important and businesses must ensure that those who are managing the payroll function are trained and skilled to do so. Or else the penalties and repercussions can be huge.
Some top tips to managing payroll for the hospitality industry are discussed below:
1. Know which award your staff fall under
It is important that you know the award your team members fall under. Most of your employees will likely fall under the Hospitality Industry (General) Award 2010. The Award was recently updated from 1 July 2019. You are required to include a copy of the award in your pub, club or hotel where staff can access it easily, such as the staff lunch room. You must also update the copy of the award as changes are made. To ensure you do not miss out on changes to the award, or are caught unaware of them, you can subscribe to updates to the award, which means that Fair Work Australia will email you a notification if there are changes to the award.
2. Summarise the award
Often, just as with most legal documents, the award can be long and at times confusing to interpret. My recommendation is to read the award and summarise the key points in a short document. This will then act as a quick reference sheet for you when cross-checking that pay obligations are met.
For example,
- What are the minimum hours that casual staff are required to work?
- How many hours can a staff member work before they must be given a break? How long is this break?
- How many hours does a staff member work before overtime kicks in?
- When do staff receive penalty rates? Where can I find these rates?
3. Get an expert to review your understanding of the award.
Once you have summarised your understanding of the award, have an expert review what you have prepared. Even though it will cost money to engage an expert, the cost will be much, much less than the implications if your understanding is incorrect. Here at Dexterous, we can help with reviewing this.
4. Communicate the award with your team
Once you have had your award reviewed, communicate the award with your team. This will save questions and confusion later, as your team will have this summary to refer to.
5. Make sure pay slips show the required information
It is important that staff payslips show the required information. Using software with an integrated payroll function, such as Xero will help in meeting these requirements. Here at Dexterous, we can set up your payroll function as well as process payroll for you.
6. Keep open lines of communication
Always ensure you keep honest and open communication lines with your team. Staff should feel confident and comfortable that if there is a mistake with their pay, they can approach you to have the issue fixed. Often pay errors are honest mistakes, either the result of award changes that business owners are not on top of, a misunderstanding of the award, or miscalculations. Staff should feel comfortable that if they raise the issue with you, that you will fix it straight away, rather than feeling they can’t trust you and they need to escalate the issue beyond you.
As you can see, getting staff pay right in the hospitality industry is complex and involves many moving parts. If you need help, ensure you engage an expert, as the costs of not doing so can be much more. If you’ve asked the “how much should I pay my employees” but don’t know where to start getting answers, this article can be your reference point. And you can always contact us at hello@dexterousgroup.com.au or give us a call on 1300 996 928.
