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Fair Work Commission – Minimum Wage to Increase by 3.3%

Background

On 6 June 2017, The Fair Work Commission announced a 3.3% increase to the national minimum wage and minimum award wages.

The Fair Work Commission Decision

In essence:

  • The national minimum wage will now be $694.90 per week, or $18.29 per hour
  • This is an increase of $22.20 per week to the weekly rate and 59 cents per hour to the hourly rate
  • The changes will be effective 1 July 2017

Fair Work Commission’s Reasoning – Economics & Worker Poverty

  • The Fair Work Act required the Fair Work Commission to take into account economic considerations
  • However, they were satisfied that the level of increase decided upon would not lead to inflationary pressure and would be highly unlikely to have any measureable impact on employment or lead to job losses
  • They based these conclusions on findings that productivity growth has risen sharply and profit growth had been “particularly strong” in 2016 compared to previous years. Consequently, business conditions were positive and above long-term averages
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Employment Law – New Financial Year Changes

What every employer MUST know for 1 July 2017

With the commencement of a new financial year, it brings with it important changes and new rates which will apply from 1 July 2017.

NEW! High Income Threshold (HIT)

With the HIT:

  • it is expected to increase to $143,500 (subject to formal confirmation by the FWC)
  • it impacts:
  • who can make a claim for unfair dismissal (for those not covered by a Modern Award or to whom an enterprise agreement does not apply)
  • the maximum amount of compensation payable in an unfair dismissal claim
  • those on a ‘guarantee of annual earnings’ (a Modern Award does not apply to an employee whilstever this guarantee is in place provided it continues to meet the relevant legislative requirements)

NEW! Modern Award Increases

With Modern Awards (including enterprise awards):

  • minimum wages increase by 3% (starting on the first full pay period on or after 1 July 2017)
  • absorption of wage increases into over-award payments is permissible (subject to the terms of the relevant employment agreement and what other amounts are being absorbed into any annualised salary)
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