Free- Penalty Rates in Retail & Hospitality Industry Free-Samples

Question: Discuss about the Penalty Rates in Retail Hospitality Industry. Answer: Introduction Minimum wage penalty rates are most controversial topics nowadays in the Australian retail hospitality sector. Minimum wage can be defined as the base rate of payment in case of employees working in ordinary hours. The Fair Work Commission helps in regulating the minimum wage of employees. On the other hand the penalty rates must be paid by employers to employees in case of working in the weekends at the same time in disadvantageous conditions. Penalty rates help in encouraging employees within an organisation for working overtime, late night shifts at the same time working in weekends public holidays. Employees generally wish to enjoy their social life in these periods therefore it is important to provide extra incentive to encourage employees (Masterman-Smith Pocock, 2008). Penalty rates act as compensation to employees working in the unsociable hours. Government of Australia had taken large incentive in providing extra support in the form of penalty rates to employees. Thou gh penalty rates are suitable in encouraging employees to work in this condition, it hurts the interest of employers of different organisations. In case of retail hospitality industries also the penalty rates are deteriorating the profitability condition of employers this on the other hand is affecting the growth rate of these organisations. Different economists have given their own arguments regarding the minimum wages penalty rates controversy is continuing in Australia in this field. It is evident that retail sector plays a crucial role in the overall growth rate of the economy. This sector has largest contribution in providing employment to large number of people in the country (Neumark Wascher, 2007). Different economist have argued that the increase in the minimum wage of employees impose large amount of pressure on employers since it escalates their overall cost of production. In both the retail hospitality industries increasing the minimum wage lead to the increase in the unemployment rate in the economy. Recently the Australian government has taken the decision to slash the penalty rate in order to encourage retail hospitality industries. Retail sector have demanded that the penalty rate should be reduced to 150% from previous 200%. The hospitality industries have also shown their interest in reducing the penalty rate from the existing rate (fairwork.gov, 2017). The penalty rates for employees working in the hospitality industry will be reduced from 175% to 150%. In case of the hospitality industry the drop in the penalty rate will lead to the decrease in the earning to $212 from $248, for people who are earning minimum wage, i.e. $17.70 per hour. Since almost 1 million workers in Australia are dependent on the penalty rates therefore reducing the penalty rates will hurt their interest. The reduction in the penalty rates will seriously affect employees with minimum wage group (Stewart, 2008). Since people with the minimum wage group generally wants to earn extra income by working i n the unsociable working hours, reduction in the penalty rates is not a fair decision for them. References fairwork.gov. (2017).fairwork.gov. [online] Available at: https://www.fairwork.gov.au/pay/penalty-rates-and-allowances [Accessed 20 Apr. 2017]. Masterman-Smith, H., Pocock, B. (2008).Living low paid: the dark side of prosperous Australia. Allen Unwin. Neumark, D., Wascher, W. L. (2007). Minimum wages and employment.Foundations and Trends in Microeconomics,3(12), 1-182. Stewart, A. (2008).Stewart's guide to employment law(Vol. 3). Sydney: Federation Press.