Xenophon proposes bill to exempt small businesses from paying penalty rates

Independent MP Nick Xenophon has weighed into the debate on penalty rates in the hospitality industry, offering his own bill to the Senate proposing small businesses be exempted from paying extra on weekends.

This comes just as Fair Work is conducting its own hearings into penalty rates in the hospitality industry. Restaurant and Catering Australia chief John Hart told SmartCompany yesterday more members are shutting down on weekends as they can’t afford to pay the higher wages.

Hart’s benchmarking survey suggests 18% of businesses were closed on weekends due to the increase in penalty rates.

More businesses are suggesting the industry adopt a standard whereby penalty rates are only granted if an employee works more than five days in a single week.

Senator Xenophon told SmartCompany this morning that his proposal would exempt small businesses with fewer than 20 full-time staff from having to pay higher rates.

“I’m speaking to many small businesses, and the small cafes and book shops just can’t afford to pay these rates any more,” he says.

“We’re seeing employees who are happy to work for $25 an hour, but they’re being priced out of the market. It’s hurting job opportunities.”

Currently penalty rates are paid on weekends and public holidays. But Xenophon’s plan would have penalty rates paid if employees work more than 38 hours in a week, or more than 10 hours a day.

“My bill is confined to the small business sector, which is doing it tough. And I think there needs to be some flexibility in clauses that allow some sort of two-tiered system.”

“If that exists, it means employers could pay above basic award rates to attract staff. But at this stage, you just have too many struggling small businesses.”

Xenophon says the motivation for the bill comes as the Fair Work hearings “will simply take too long”.

“I expect there to be a robust debate about this, I think it’s important. The Coalition hasn’t seemed willing to tackle this issue, and I think it’s something of pressing concern.”

The Federal Government is unlikely to support the bill. Workplace Relations Minister Bill Shorten has repeatedly said the government won’t support any bill that reduces wages for the lowest-paid workers.