3.5%
– the increase percentage all minimum wage workers will receive after the Fair Work Commission has handed down its annual wage review decision this morning.
This was a decision the Commission was trying to balance after receiving recommendations from various Unions and Employer Associations – trying to balance cost of living pressure, with weak productivity data and tight business margins on the other end.
What it means for my team members
New National Minimum Hourly Wage: $24.95
New National Minimum Weekly Wage: $948
The decision means employees will receive an additional $32.10 per week, or 85 cents per hour.
When does the increase apply from?
The changes to the National Minimum Wage and Award Wages applies from the first full pay period on or after 1 July.
If you know what classification level each employee is within the specific Modern Award, and once the percentage increase has been applied, the employee is still above Award (unless you have specified in an agreement elsewhere), there is no need to pass on the increase.
If an employee is above Award, but after the increase is applied, they fall short, you need to pass on an increase that means they are at least what the relevant Modern Award classification level is for them (or the National Minimum wage, if relevant).
Common mistakes we see
I pay “above Award” so I don’t need to pass on the increase… But actually, you aren’t confident you know what the baseline rate is to say employees are paid “above Award”.
What to do…
Review the relevant industry and/or occupational Modern Awards for coverage to see what applies. If nothing, and if your business does not have an enterprise agreement, it is likely the National Minimum wage will apply for those employees.
Pay particular attention to the classification levels that have been assigned to each employee within the Award, and compare the rate for the classification level, to what the employee is paid.
If the employee is still above Award, no need to pass on an increase.
If the employee falls below the new classification level rate, increase to at least the new classification level rate.
If you’re unsure of Modern Award coverage or what classification levels are right for your employees, contact UPP HR, or visit the Fair Work Ombudsman pay and conditions tool for extra information https://calculate.fairwork.gov.au/
Why do I need to pay attention to this?
Wage theft in Queensland is now a criminal offence. What the means is, if you are a business owner, or someone that is connected to the processing of payroll and deliberate underpayment occurs, you can be personally liable under the Fair Work Act. Serious breaches can attract penalties in the 6 and 7 figures, and potential jail time.
When don’t I need to pass on this increase?
If your business has a current enterprise agreement that sets out its own wage increase schedule, or if employees are paid significantly above any legislated minimum entitlements and Employment Contracts include ‘offset’ clauses, there is likely no need to pass on this increase.
How do I overcome cost of living conversations with employees when I’m getting pressured for substantial pay increases?
Recent Searches and Penalties
The Fair Work Ombudsman is currently seeking penalties against organisations in a variety of industries, mainly for reducing entitlements or deducting unlawful amounts from wages of migrant workers.
With an increased interest in some sectors, particularly for Employers employing visa workers or “vulnerable workers”, it’s a timely reminder for Employers to double check pay and entitlements (and records of same). As vulnerable workers are of particular interest to The Fair Work Ombudsman this may lead to closer scrutiny to ensure Employers are complying.