By Louise Missen | Head of Member Services, Australian Payroll Association
Part-time employment is common across the hospitality industry but the interaction between guaranteed hours, employee availability, rosters and leave accruals can create unexpected payroll risks.
A frequent mistake is assuming that a part-time employee accrues paid leave only on their guaranteed hours. Under the Hospitality Industry (General) Award 2020, additional rostered hours may also be ordinary hours on which leave accrues.
Start with the written agreement
Clause 10.4 requires the employer and employee to agree in writing at the time of engagement on:
-
the number of hours the employee is guaranteed to be provided and paid each week or over the roster cycle.
-
the days and times during which the employee is available to work those hours.
These are known as the employee’s guaranteed hours and availability.
A contract that simply describes an employee as “part-time” or provides an approximate number of weekly hours may not adequately meet these requirements.
The written agreement is not merely an HR document. It provides essential information for rostering, overtime calculations, leave accruals and payroll processing.
Guaranteed hours cannot be changed unilaterally
Under clause 10.5, a part-time employee’s guaranteed hours may only be changed with their written consent.
An employer cannot simply reduce the employee’s guaranteed hours because the venue is quieter than expected, operating requirements have changed or fewer shifts are available. Equally, repeatedly rostering an employee for additional hours does not automatically amend the original agreement.
Any agreed change should be:
-
recorded in writing
-
completed before the change takes effect
-
retained with the employee’s employment records
-
reflected in the rostering and payroll systems
A roster change, verbal discussion or established pattern of work may not by itself demonstrate that the employee has provided written consent.
Guaranteed hours are not maximum hours
Guaranteed hours are the minimum hours the employer has agreed to provide and pay. They are not necessarily the maximum ordinary hours the employee can work.
An employer may roster a part-time employee for additional hours where those hours fall within the employee’s recorded availability and comply with the Award’s rostering and hours-of-work provisions.
This distinction is particularly important when calculating paid leave.
The Fair Work Ombudsman’s guidance confirms that a part-time employee’s ordinary hours include:
-
their guaranteed hours
-
additional hours rostered during their availability
Paid leave accrues on both.
When do additional hours become overtime?
Hours worked above the employee’s guaranteed hours are not automatically overtime.
Overtime may apply when a part-time employee works:
-
hours that were not rostered
-
more than 38 hours per week or an average of 38 hours over the roster cycle
-
beyond the applicable maximum daily ordinary hours
Consider an employee who is guaranteed 25 hours per week and is usually rostered for five hours each weekday. If the employee is rostered in advance to work an additional hour each day within their availability, all 30 hours are ordinary hours on which paid leave accrues.
If the employee is then asked during a shift to work another two hours that were not rostered, those additional hours are overtime. Paid leave does not accrue on the overtime hours.
For payroll, the key question is not simply whether the employee worked more than their guaranteed hours. It is whether the additional hours were properly rostered.
Why payroll configuration matters
A payroll system that calculates leave only on guaranteed hours may understate an employee’s leave balance.
Conversely, a system that automatically treats every hour above the guaranteed amount as overtime may overpay overtime while incorrectly excluding ordinary hours from leave accruals.
Payroll must be capable of distinguishing between:
-
guaranteed ordinary hours
-
additional ordinary hours included in the roster
-
unrostered additional hours
-
hours exceeding the Award’s weekly or daily limits
Accurate configuration also depends on reliable information moving between the employment agreement, roster, timekeeping system and payroll platform.
A practical payroll review
For each part-time employee covered by the Hospitality Award, payroll professionals should confirm that:
-
a written part-time agreement is held
-
guaranteed hours are clearly specified
-
the employee’s days and times of availability are recorded
-
changes to guaranteed hours have the employee’s written consent
-
additional ordinary hours are rostered within the employee’s availability
-
leave accrues on all rostered ordinary hours
-
unrostered hours are assessed for overtime
-
the agreement, roster, timesheet and payroll system remain aligned
Where an employee has regularly worked ordinary hours above their guaranteed hours for at least 12 months, they may also request an increase to their guaranteed hours. Comparing guaranteed, rostered and actual hours can help identify arrangements that may require review.
Would your payroll system get this right?
The difference between guaranteed, rostered and unrostered hours can change both overtime payments and leave accruals. When these hours are not clearly distinguished, even a well-configured payroll system may produce the wrong result.
It is one of the many Hospitality Award scenarios worth testing before it appears in a pay run. Payroll professionals can explore these practical issues further in Australian Payroll Association’s Understanding the Hospitality Award virtual classroom on 1 October 2026.