The cut to penalty rates and why it matters to you

It’s recently been decided that weekend penalty rates for retail and hospitality workers are going to be cut. If that sentence made your head spin a little bit, then don’t worry. It’s sometimes hard to work out what will actually change following big news like this - or even what the big news means - so if you’re feeling a little bit lost, here is a simple guide to the cuts and how they might affect you.

This can help if:

  • You have a retail or hospitality job at a restaurant/shop/cinema/gym or anywhere else where you sometimes have to work on a Sunday
  • You have a friend or family member who is worried the penalty rates cut will negatively affect them
  • You are confused by what the penalty rates cut means
Cuts to penalty rates

What are penalty rates?

Penalty rates are extra money that you get paid for working a job on Sunday or on public holidays like Christmas. Basically, penalty rates exist because society understands that weekends are a time for, well, weekend stuff, and that if you’re working on a Sunday, there are things you have to give up – like hanging out with your mates, or hitting up a party.

What are penalty rates

How much did penalty rates get cut?

Penalty rates have been cut in different ways depending on the kind of work you do. If you work a retail job covered by the Retail Award – like at a shop, for example – then instead of getting paid double your usual wage on a Sunday, you will now only get paid your wage plus an extra half. 

That means if you make $20 an hour during the week, you will be paid $30 an hour on a Sunday instead of the $40 an hour you would have gotten before the cuts.

If you work a fast-food job under the Fast Food Award, then instead of getting paid your usual wage plus an extra half, you will now only get your usual wage plus an extra quarter. 

Fast food

Because of these cuts, some people are going to lose up to $6,000 a year.

Why did penalty rates get cut?

The Fair Work Commission decided that the penalty rates in the Retail and Fast Food Awards should be cut. Companies argued that the cuts will mean more businesses will be open for longer on a Sunday, as it is now less expensive for companies and owners to pay their workers. 

But some other people, including Labour leader Bill Shorten and leader of the Greens Richard De Natale, are saying that the cuts are just a way of hurting young people, and that the cuts stop people who already don’t make much money from getting a fair go.

What can I do now?

First off, don’t panic: the penalty rates cuts won’t come into effect for some time. Some employers and business owners are even saying that they will continue to pay penalty rates despite the fact that they don’t have to. So it’s not necessarily the case that you will definitely miss out on your full Sunday or public holiday pay.

Secondly, you should consider joining your Union. Unions fought hard to stop penalty rates being cut and are going into bat for retail and hospitality workers to get them back. 

Thirdly, it’s also a good idea to have a proper chat with your boss about how the penalty rates cut makes you feel, and how it might affect how much you want to work on weekends. 

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Last reviewed: 03 March, 2017
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