Australia’s 1.86 million employees reliant on the minimum wage can look forward to a 2.4 per cent pay increase in respect of their first full pay period on or after 1 July 2016.
The Fair Work Commission’s Expert Panel handed down its decision on 31 May 2016 in the Annual Wage Review case with the increase set as follows:
- the national minimum wage will rise by 2.4 per cent to $672.70 per week or $17.70 per hour
- minimum wages in all modern awards will also increase by 2.4 per cent (with weekly wages rounded to the nearest 10 cents)
What should employers do?
- review – over the next few weeks employers are strongly encouraged to review each employee’s pay rate to ensure they are ready for the increase on 1 July 2016
- absorb or increase – decide which employees need a pay rise to meet the minimum pay rate obligations set by workplace law and decide whether part or all of any increase can be legally absorbed into current rates of pay
- systems – ensure payroll systems are updated and ready to pass on the increased wages from the first full pay period on or after 1 July 2016
- salaried staff – ensure that an employee’s salary is still sufficient to cover the employee’s minimum entitlements under the increased national minimum wage (or an increased modern award/enterprise agreement wage if applicable)
- additional costs – be mindful that as pay rates rise, so can other items such as modern award allowances, the accrued value of leave entitlements, superannuation obligations, anything calculated by reference to wage rates such as payroll tax and workers compensation premiums – employers need to understand what they can and cannot do to address these consequential costs
- penalties – note that workplace law penalties of up to $54,000 per contravention apply to employers who fail to comply with minimum wage obligations (and those involved in any contravention can also face penalties)
If you require any assistance or advice on employment law matters such as employment contracts or you require an immigration lawyer Sydney, please contact a member of the Matthews Folbigg Workplace Solutions team including:
Stewart Gough Emily Slaytor
P: 9806 7483 P: 9806 7412
M: 0458 586 444 M: 0447 227 770