Economic Impacts of Reductions In Penalty Rates for Sunday & Holiday Work

by Jim Stanford

Our Centre has conducted considerable research into the impacts of the Fair Work Commission’s decision to substantially reduce penalty rates for Sunday and holiday for workers under the terms of the Modern Awards covering four sectors of the economy: fast food, retail, hospitality, and pharmacy. Penalties for Sunday work will be reduced by up to half; penalties will also be reduced for working on public holidays.

The workforce employed in these predominantly low-wage service sectors already experiences several dimensions of precarious and insecure work arrangements, including a heavy incidence of part-time work, casual work, and irregular hours. The income derived from penalty rates makes an important contribution to the incomes of these workers – who already struggle with balancing their personal and household budgets given these generally irregular work arrangements. Reductions in weekend income will make matters worse for a group which is already struggling. This workforce includes a disproportionate share of relatively disadvantaged populations, including women, young workers, and immigrant workers.

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