Hospitality Bookkeeping: How to Address Underpayment in the Hospitality Industry

Wages in the hospitality industry has become a national issue due to the underpayment of staff at many Australian restaurants and cafés, according to hospitality bookkeeping and accounting firms. Some think charging offenders with fines are letting them off too lightly. The government is now considering criminalising wage theft.


Restaurant and café owners say that some breaches are simply accidental and the awards that govern the pay and working conditions in the hospitality industry are complicated and inflexible. Profit margins have become very narrow because of rising costs of rent, supplies and utilities along with the competitive low pricing of meals and beverages in restaurants and cafés. Operators need to be very careful with how they control their costs to keep their businesses open.

It is important for restaurant and café owners to keep their menu selection simple and innovative, and to only use produce that is in season to keep their costs down. Patrons want to go to good restaurants perhaps it is now time for them to pay for that quality too.

The hospitality industry is under pressure and industry award rates may have increased well above inflation. The industry is covered by over 20 different awards aside from overtime, penalty rates and annual rates which are complex to negotiate. However, there should be full compliance with workplace laws; the Fair Work Ombudsman will not condone underpayment. It is prudent for owners to consult with their hospitality bookkeeping and accounting firm to avoid hefty fines.

Hospitality employers face tough competition and low profit margins that’s why they are tempted to underpay their workers. It is in their best interest to have employment laws properly enforced so they can operate on a level playing field. However, resources must be increased to implement the laws.

The hospitality industry employed over 881,000 people in 2018, representing about 7.1 per cent of the country’s total workforce. 18 per cent of Fair Work disputes in 2018 involved hospitality workers. They are one of the most frequently sponsored for temporary skilled visas and because of their dependence to their employers, employees rarely report any breach in employment laws.

Because of its low margin environment, restaurants have a higher ratio of insolvency. They need to maintain margins because liabilities will accrue. The businesses that close are usually those who fail to innovate in the way they structure their costs to ensure they get the best value from their staff. Before opening their new restaurant or café, owners should have a clear understanding of the hidden costs associated licences, insurances, workplace health and safety and utilities, among others. It is important not to forget about these costs. This is where Sky Accountants can help businesses.

Hospitality Bookkeeping

As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.

You can click here to speak to a businessaccounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.

We would love to help you formulate investment strategies and streamline your processes to take your business to the next level.  Our goal is to help you grow your business, find ways to invest more and increase your productivity.

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