Loaded rates added to Hospitality Award

Published 6 September 2021 | Updated 29 September 2021

illustration showing different types of hospitality industries, such as pubs and gaming and accomodation

On 3 September 2021, the Fair Work Commission (the Commission) made a decision external-icon.png that added loaded rate arrangements to the Hospitality Award.

These new provisions apply on or after the first pay period starting on 3 September 2021.

Loaded rate arrangements

The Commission has added Schedule K – Loaded Rate Arrangements to the Hospitality Award. Under these new arrangements, employers can elect to pay a loaded rate to a full-time adult employee classified at Level 3 or above to absorb some other entitlements under the Hospitality Award.

For eligible full-time employees, the loaded rate replaces:

  • some overtime payments
  • some penalty rates (but not public holiday penalty rates, for example)
  • the split shift allowance when the period between shifts is between 2 and 3 hours.

Part-time or casual employees can’t enter into loaded rate arrangements. They also don’t apply to employees who are:

  • classified at introductory level, Level 1 or Level 2
  • being paid junior rates
  • being paid a supported wage rate
  • working in catering in remote locations (under clause 15.3)
  • working an average of 160 hours each 4 week period with a minimum of 8 days off and an accrued day off (under clause 15.1(b)(vii)).

Rostering requirements

To be paid a loaded rate, an eligible employee’s hours must satisfy certain rostering requirements. These are known as Loaded Rate Parameters.

The requirements are:

  • a roster cycle must operate weekly starting on a Monday
  • if the break between split shifts is 3 hours or more, a split shift allowance must be paid
  • Monday to Friday: a maximum of 11.5 hours (not including meal breaks) per day or a shift rostered between 7am and 12am (midnight)
  • Saturday: a maximum of 10 hours (not including meal breaks)
  • Sunday: a maximum of 10 hours (not including meal breaks).

How to make a loaded rate arrangement

If an employer wants to introduce loaded rates to the workplace, they must consult with affected employees at least 7 days prior. This can include with an employee representative too.

Employers need to provide an employee with a written loaded rate arrangement. Employers can use the written form prepared by the Commission: Loaded Rate Arrangement form external-icon.png.

The form needs to include:

  • names of the employer and employee
  • employee’s classification or wage level
  • loaded rate range of days
  • loaded rate maximum weekly hours
  • loaded rate percentage
  • ordinary hourly rate
  • loaded rate (ordinary hourly rate x loaded rates percentage).

Record-keeping and consultation

The employer needs to keep a copy of the loaded rate arrangement and any documents terminating that arrangement as a time and wages record.

An employer can vary a loaded rate arrangement by giving 2 weeks’ written notice and then issuing a new arrangement. The usual rules about consultation when changing rosters or hours of work will apply to varying a loaded rates arrangement (see clause 39).

The employer also needs to keep a record of the employee’s start and finish times of work and any unpaid breaks taken. This record needs to be signed by the employee or acknowledged as correct in writing (including by electronic means) by the employee each pay period or roster cycle.

Example: Making a loaded rate arrangement

Renee runs a bed and breakfast and has 4 full-time staff. Each staff member is classified as Level 3 under the Hospitality Award.

Renee tells her staff that she wants to start paying them a loaded rate.

Renee arranges a meeting with her employees and their representatives to consult about how the arrangement would work. She explains that they will start being paid a higher rate to absorb some other entitlements. Renee tells her employees that the arrangement will start in 7 days’ time.

The employees discuss the arrangement with Renee and talk through how it will work. Renee then sends them a copy of the Loaded Rate Arrangement form external-icon.png to read and complete.

When the arrangement can be terminated

A loaded rate arrangement can be terminated:

  • at any time by written agreement between the employer and employee
  • by the employer giving 2 weeks’ written notice.

How to calculate loaded rates

We have updated our Pay and Conditions Tool to include these new loaded rates. This includes different loaded rates for casino gaming classifications as well as other Hospitality Award classifications.

You can access the loaded rates in our tool by:

  • selecting the Hospitality Award
  • adding in other relevant criteria, such as classification level
  • confirming your employment type (full-time employee).

Our Pay and Conditions Tool will let you save and download these pay rates too.

You can also access the rates in the Hospitality Award – Schedule K external-icon.png.

Working more than the loaded rate maximum weekly hours

An employee who works more than their loaded rate maximum weekly hours will be entitled to receive the usual penalty or overtime rate at their ordinary pre-loaded pay rate.

Example: Working more than loaded rate maximum weekly hours – Overtime

Mario is on a loaded rate arrangement to work a maximum of 40 weekly hours between Monday to Friday.

Due to unexpected demand, Mario’s employer asks him to work a 5 hour shift on Saturday. Mario agrees.

Mario’s employer explains that because Mario is working an additional 5 hours over the 40 weekly hours under the loaded rate arrangement, he is entitled to receive overtime based on his ordinary pre-loaded pay rate (not on the loaded pay rate).

For the 5 hour shift on Saturday, Mario gets paid 200% of his ordinary hourly rate for each hour worked.

Resolving disputes

Disputes under Schedule K can be resolved by the Commission.

An employer who enters into a loaded rate arrangement with an employee agrees to any dispute arising from the arrangement being settled by the Commission.

In dealing with any disputes, the Commission may:

  • terminate an agreement if it determines that the employer failed to consult with the employee
  • require an employer to pay an employee the difference between what they were paid under the loaded rate arrangement and what they would otherwise have received under the award if it determines that the arrangement entered into is unfair to the employee
  • terminate an agreement if it determines that the arrangement entered into is unfair to the employee.

Get more information on resolving disputes under these changes at the Fair Work Commission – Interpret or enforce an award external-icon.png.

Our information and tools

Tools

Our Pay and Conditions Tool has also been updated to include the new loaded rates.

You can also access the rates in the Hospitality Award – Schedule K external-icon.png.

Workplace information

We have updated the information on our website to reflect these changes.

You’ll find general workplace information for the Hospitality Award below, such as on overtime pay or hours of work. Just select the hospitality industry to get tailored information for you.

More information

For further information on the changes, read the Fair Work Commission decision external-icon.png and determination external-icon.png.