What Australia’s minimum wage increase means for the hospitality industry

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The move to raise Australia’s national minimum wage by 5.2% has drawn a mixed response from hotel and accommodation businesses, with some fearing it will weigh on businesses as they rebuild after the impact of the pandemic.

Effective July 1, 2022, the minimum wage will increase by $40 to $812.60 per week or $21.38 per hour, for a full-time employee working a 38-hour week.

Minimum wages above $869.60 a week will get a 4.6% increase, while those below $869.60 a week will get a $40 increase.

Tourism Accommodation Australia CEO Michael Johnson said the increase was higher than expected.

“We always thought a 3% to 4% pay raise was definitely on the table,” Johnson said. SM.

“The 4.6% is a bit higher than expected, however, with current inflation rates, it’s understandable.”

Johnson said while the decision is good news for employees, it is likely to put pressure on businesses emerging from the pandemic.

“This will put additional financial pressure on our hotels which have done so much harm over the past two years,” he said.

“That doesn’t mean we don’t want to see our hard-working staff well compensated – as we battle a chronic labor shortage.”

Hilton Regional Vice President and Head of Australasia Paul Hutton welcomed the move, saying it is an important part of attracting talent to a rewarding career in hospitality.

“The past two years have at times made it difficult to demonstrate the value of a career in hospitality, but it’s that kind of recognition combined with travel opportunities and countless career development paths that make all the difference. difference,” Hutton said. SM.

“I know firsthand how rewarding a career in hospitality is, having started in the industry 38 years ago as a mini bar attendant at Hilton in Geneva. The diversity of work opportunities for a company such as Hilton has meant that my career has been varied and the adventure of a lifetime.

“I’ve lived in 11 countries (and counting), hosted countless guests and worked with incredibly motivated and inspiring teams throughout my career, and nothing brings me greater satisfaction to see our team members also build rewarding careers.”

Sidekicker, an on-demand recruitment start-up, said it had noticed many companies in the sector had already increased their rates to recruit talent amid Australia’s labor shortage.

“Over the past year, as labor shortages have increased competition for talent, we’ve seen companies increasingly offer to our Sidekicks – the casual workers on the platform. Sidekicker – rates more than 5% above minimum wage, on average,” Sidekicker said. CEO, Thomas Amos.

“In particular, the hospitality and healthcare sectors have significantly increased their inactivity rates from 15-25% and up to 30% and beyond for certain roles compared to six months ago. . Raising the minimum wage will be a welcome relief for workers, but for many companies that employ temporary and casual workers through Sidekicker, the rate hike has already happened.

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