The Minimum Wage Panel (“Panel”) has today handed down its ninth minimum wage decision which increased the National Minimum Wage, together with all Modern Award minimum rates of pay, by 3.5%. The ACTU called for a record $50 a week increase in light of the increased cost of living in Australia and the need to aid working families who are currently struggling to pay their bills. However, the Panel advised the 3.5% increase more closely reflects a moderate increase based on economic indicators now pointing to a healthy national economic environment and strong employment growth, particularly compared to the time of last year’s wage review.
The Panel reasoned that low wage growth has a significant economic and social consequences and that it was appropriate to provide a real wage increase to those who have their wages set by the National Minimum Wage and Modern Awards.
From 1 July 2018, the National Minimum Wage will increase to $719.20 per week, or $18.93 per hour.
What this means for you:
- Employers who pay their employees at the National Minimum Wage or Modern Award rates of pay will need to apply the increase in the first full pay period commencing on or after 1 July 2018;
- Employers who currently pay above National Minimum Wage or Modern Award rates of pay are not obliged by this decision to increase their rates of pay, but need to ensure their rates remain at least as beneficial, once the increase is applied; and
- Employers who pay under enterprise agreements must ensure that the base rates in those agreements remain at least equal to the new minimum Modern Award rates.
Annualised Salaries and Individual Flexibility Agreements
If you have implemented Individual Flexibility Agreements, you will need to reassess those agreements to ensure employees remain “better off overall” when compared to the newly increased Modern Award rates.
If you pay any of your employees under annualised salary arrangements you will need to conduct an audit of those annualised salaries against the new Award rates and working patterns to ensure the annual salary compensates for award entitlements.
FCB Group, parent company of enableHR, can help you understand how this decision affects your business, including explaining how it works, auditing and calculating pay rates and assisting you implement an appropriate strategy.
If you would like assistance with any of these matters, call FCB on (02) 9922 5188 or (03) 9098 9400.