Australia’s Fair Work Commission Review has announced a 3% increase to the national minimum wage. This brings the base figure up to $740.80 per week or $19.49 per hour, although the exact numbers vary slightly depending on your award. It has also announced an increase of 3% in all modern award minimum wages, which govern minimum mandatory pay rates in certain occupations or industries. If you would like to check your award or double check that of your workers, the government’s Fair Work website has an easy to use tool to help you find which award applies. The 3% increase is lower than last year’s increase of 3.5% and significantly lower than the 6% that the Australian Council of Trade Unions was advocating for. The review also determined that casual loading in modern awards will remain at 25 per cent and the casual loading in the Business Equipment Award 2010 will be increased to 24 per cent.

The increase will take effect from the first full pay period after 1 July this year. If you handle payroll for your business, make sure to set a reminder to update your details. Even if your software makes these adjustments automatically, it is essential to double check so that you don’t get caught out and accidentally underpay your employees.

So, who does the minimum wage increase apply to?

The Fair Work Commission anticipates that around 2.2 million Australians will benefit from the increase. Approximately 21% of all employees have their wages set by the national minimum wage or by a modern award minimum wage and will, therefore, be directly affected by the increase. Others who will likely be impacted include:

  • employees paid close to minimum wage
  • those whose pay is set by a collective agreement linked to the Fair Work Commission Review
  • workers whose rate is set by individual arrangements which are referenced to a modern award minimum wage rate.

Due to how these figures are calculated, the increase also applies to modern award minimum wages for:

  • junior employees
  • employees to whom training arrangements apply
  • employees with a disability
  • piece rates.

All of these ‘minimum wage plus’ style agreements mean that the increase will impact roughly a further 20% of the labour force.

If you are having trouble determining whether this increase affects you or not, you can read the Fair Work Commission official statement, or talk to an accountant. The experienced accountants at Arabon will be happy to help you determine whether this change applies to you and your workers. Call us today on 1300 ARABON or visit our website for more information.