HR Law Alert: Annual Wage Review 2020/2021

HR Law Alert: Annual Wage Review 2020/2021

The Fair Work Commission has today delivered its annual wage review 2020/2021 decision, increasing the National Minimum Wage by 2.5% from $753.80 per week or $19.84 per hour to $772.60 per week or $20.33 per hour from 1 July 2021.  This is an increase of $18.80 per week or .49 cents per hour to the hourly rate.  Modern Award minimum rates will also increase by 2.5%

The Fair Work Commission has created three date categories for when the award wage increases will become effective dependent upon which category an employee falls within. Similar to the 2019/2020 Annual Wage Review decision, the Fair Work Commission has delayed the increase for certain industries that have been affected by the Coronavirus pandemic, namely aviation, fitness and tourism and for some awards that have only recently received an increase. 

The first category wage increases commence from the first full pay period after 1 July 2021, with the next on 1 September 2021 and then on 1 November 2021.  A summary of the decision which outlines which Modern Awards fall within each group can be accessed here: https://www.fwc.gov.au/documents/wage-reviews/2020-21/decisions/2021fwcfb3501.pdf

If any of your employees are covered by a Modern Award and you are unsure what Modern Award and/or minimum rate will apply and when, contact the HR Law team for assistance.   We can also assist with reviewing your current contracts of employment and wage rates to see if the increases announced today can be absorbed into your existing pay arrangements.

A reminder for Enterprise Agreement covered employers – if you have an Enterprise Agreement covering any of your employees, the rate increase may also affect you. Specifically, Enterprise Agreement based employees cannot be paid less than the minimum base rate that they would be paid under an applicable Modern Award.  Accordingly, you should conduct a review of the base rates under your Enterprise Agreement and compare this to the rate each employee would receive under the applicable Modern Award when the increase takes effect.  You should also check if the Enterprise Agreement contains an increase mechanism for rates that apply in the new financial year and the effect of the phased increases.  The HR Law team can assist you with this process.

The team at HR Law remain committed to assisting employers navigate their legal obligations and the changes and developments in the law. If you have any questions or need assistance, please contact us on 07 3211 3350.

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