19 Jun MINIMUM WAGE SET TO INCREASE BY 1.75%

The Fair Work Commission has today delivered its annual wage review decision, increasing the minimum wage by 1.75% from $740.80 per week or $19.49 per hour to $753.80 per week or $19.84 per hour from 1 July 2020.  This means $13.00 more per week or 35 cents per hour to the hourly rate.  Modern Award minimum rates will also increase by 1.75%.

The Fair Work Commission has created three (3) categories for when the award wage increases will become effective. The increases will become effective at different times, depending on what category an employee falls within.

The first category wage increases commence from the first full pay period after 1 July 2020, with the next on 1 November 2020 and the final on 1 February 2021 as set out below:

1 July 2020 – National Minimum Wage and Group 1 Awards

• Front line health care and social assistance workers
• Teachers and child care workers
• Other essential services

1 November 2020 – Group 2 Awards

• Construction
• Manufacturing
• A range of other industries

1 February 2021 – Group 3 Awards

• Accommodation and food services
• Arts and recreation services
• Aviation
• Retail trade
• Tourism

A summary of the decision which outlines which Modern Awards fall within each group in Attachment 1, can be accessed here: https://www.fwc.gov.au/documents/wage-reviews/2019-20/decisions/2020fwcfb3501.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 applies in the new financial year and the effect of the phased increases.  The HR Law team can assist you with this process.

 If you have any questions about the changes and how they will affect your business, contact the team at HR Law for advice