Employer Not Paying Penalty Rates in Hospitality?
Last updated: March 2026 · Rates effective 1 July 2025 · MA000009
If your employer is paying the same rate every day regardless of whether it's a Sunday or a public holiday, there's a high chance your penalty rates are being missed — intentionally or not. Penalty rates under the Hospitality Award are a legal minimum. They cannot be waived by agreement, explained away by a flat rate, or simply not applied because the employer prefers not to.
If you work weekends or public holidays and your pay doesn't reflect that — this applies to you.
Real example
Scenario: Casual waitstaff, Level 2. Works 2 Sundays and 1 public holiday per month.
What they were paid: $0.00/hr for every shift
What should have happened: Sunday casual = $0.00/hr. Public holiday = $0.00/hr
Underpayment: ~$152 per Sunday shift, ~$202 per public holiday shift, ~$506/month, ~$6,072/year
Why it happens: Employer applies one casual rate across the board. Penalty rates are never separated out. Worker assumes the rate is correct.
When are penalty rates legally required?
Under the Hospitality Industry (General) Award 2020, penalty rates must be applied for:
- All Saturday shifts — for both permanent and casual employees
- All Sunday shifts — for both permanent and casual employees
- All public holiday shifts — at 2.25× the ordinary rate
- Evening shifts after 7pm — a per-hour loading applies
- Late night shifts after midnight — a higher per-hour loading applies
These are the legal minimums. Your employer must apply them — regardless of what your contract says, regardless of whether it's stated on your roster, and regardless of any verbal agreement to the contrary.
If your payslip doesn't show separate lines for each day type, that's a red flag. Check your penalty rates →
Can a flat rate legally replace penalty rates?
Only under very strict conditions. A flat rate arrangement satisfies the award only if the employer can demonstrate — with actual calculations — that the flat rate is higher than every award entitlement across every possible shift scenario, including:
- Sunday casual rates
- Public holiday rates (2.25×)
- Evening and late-night loadings
- All applicable allowances
If your employer claims a flat rate covers everything but hasn't shown you the numbers, that claim is very likely incorrect.
If you're on a flat rate and want to check, Check your penalty rates →
⚠️ Common situations where penalty rates are wrongly withheld
"Your rate includes weekends"
A verbal explanation is not a legal arrangement. Even if told this at the time of hire, the award applies. If the flat rate doesn't demonstrably cover the highest penalty scenarios, you're owed the difference.
Penalty rates paid at wrong multiplier
Applying Saturday rate on Sundays, or double time (2×) instead of 2.25× on public holidays. The wrong multiplier on every affected shift is underpayment.
Casual employees told they're not entitled
Casual employees are entitled to penalty rates under the Hospitality Award. The 25% casual loading does not replace them.
Penalty rates applied to permanent rate instead of casual rate
The penalty multiplier should be applied to the casual base rate (which already includes the loading). Applying it to the pre-loading base rate understates the amount owed.
These issues rarely happen in isolation — and even one can result in hundreds or thousands in underpayments per year.
What to do if your employer refuses
Step 1: Document your shifts — rosters, text messages, calendar records. Get your payslips together.
Step 2: Raise it with your employer in writing. State the award clause and the correct rate. Give them a reasonable timeframe to respond.
Step 3: If unresolved, lodge a complaint with the Fair Work Ombudsman at fairwork.gov.au or call 13 13 94. They investigate for free and can recover unpaid wages going back 6 years.
See the full guide to reporting underpayment.
Not sure if your Hospitality Award pay is right?
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Frequently asked questions
My employer says our industry doesn't use penalty rates — is that true?
No — and that claim is wrong. If you've been told this, there's a strong chance your pay has been incorrect. The Hospitality Award explicitly sets penalty rates for all covered employees.
What if I agreed to the flat rate when I started?
You cannot legally agree to waive award entitlements. A contract or verbal agreement that does so is not enforceable. You're owed the award rate regardless of what was agreed at hire.
Can I be fired for raising this?
The Fair Work Act's general protections provisions make it illegal for your employer to take adverse action — dismissal, demotion, reducing hours — because you raised a pay complaint. If that happens, it's a separate and serious breach.
Don't guess — small underpayments add up fast.
Enter your shifts and see exactly what you should have been paid.
It takes 2 minutes — and you'll know the exact shortfall.
Based on official pay rates from the Fair Work Commission (MA000009).
Not sure if your Hospitality Award pay is right?
Enter your shifts and find out in 2 minutes. Free, instant, based on official Fair Work rates.
Check my pay nowNo sign-up required
Rates sourced from the Fair Work Commission pay guide for the Hospitality Industry (General) Award 2020 (MA000009), effective 1 July 2025. General information only — not legal advice. Verify at fairwork.gov.au.