Understanding Salaries under the HIGA and RIA

08/04/24

Understanding Salaries under the HIGA and RIA

A salary is a method of paying full time (or in some cases part time) employees. For Award covered employees, the salary arrangements permitted under the Hospitality Industry General Award 2020 (HIGA) and the Restaurant Industry Award 2020 (RIA) are set out below.

HIGA

Annualised Wage Arrangement (clause 24)

This salary arrangement may be used for full time employees whose position falls under a classification which attracts a level 1 to 6 rate of pay.

Such salary arrangements must be recorded in writing and agreed between the employer and the employee.

If the employer pays an annualised wage of an amount that is at least 25% above the minimum wage for the applicable level, the employee will not be entitled to receive the following entitlements under the HIGA provided the written agreement states which provisions have been incorporated into the salary:

1. Minimum rates (clause 18)
2. Allowances (clause 26)
3. Overtime (clause 28)
4. Penalty rates (clause 29)
5. Payment of leave loading (clause 30.3)
6. RDO coinciding with a public holiday (clause 35.3).

In the event the entitlements (whether all or some) are not referred to in the written agreement, the employee will need to be paid the relevant entitlement(s) on top of their salary if and when applicable.

Any hours worked in excess of the outer limit hours set out in clause 24.2(b) of the HIGA (which can be averaged across a roster cycle) must be paid on top of the annual salary and at the rate applicable the day on which these hours are worked.

The employer must undertake an annual reconciliation of all annualised wage agreements to ensure the salary was sufficient to cover what the employee would have earnt if the employee was paid by the hour and in receipt of all applicable entitlements under the HIGA. Any shortfall must be paid to the employee within 14 days of the reconciliation being conducted.

As the employee cannot be worse off, members may wish to cost out a mock roster for a particular employee to determine whether 25% above the minimum rate is sufficient for determining the basis of the salary figure.

Managerial Absorption Salary (clause 25)

This salary arrangement may be used for an employee whose position falls under the Managerial Staff – Hotels classification.

In the event an employee is paid at least the managerial absorption salary ($70,697.00 at the time this article was written), the employee will not be entitled to receive the following HIGA provisions:

1. Part time employees (clause 10);
2. Rostering and ordinary hours of work arrangements (clause 15)
3. Breaks (clause 16)
4. Allowances (clause 26)
5. Overtime (clause 28)
6. Penalty rates (clause 29)
7. Payment of leave loading (clause 30.3)
8. RDO coinciding with a public holiday (clause 35.3); and
9. Deductions for provision of accommodation and meals (clause 37).

An employee engaged under this arrangement:

1. must receive 8 days off in a four week cycle; and
2. will receive time in lieu for time worked on a public holiday with such time to be taken within 28 days of it accruing.

RIA

Annualised Wage Arrangement (clause 20)

The annualised wage arrangement in the RIA is substantially the same as the HIGA, other than the award provisions which may be incorporated into the salary are as follows:

1. Minimum rates (clause 18)
2. Split shift allowance (clause 21.3)
3. Overtime (clause 23)
4. Penalty rates (clause 24); and
5. Payment for annual leave (leave loading) (clause 25.3).

Members should contact Owen, Sarah or Didier if they have any queries about salary arrangements, or payment options generally, under the HIGA or RIA.