As usual at this time of year, the Fair Work Commission has made its ruling on increases to the minimum wage and all other Award pay rates. The increase applies to anyone who is paid minimum award wages or the national minimum wage.
So what is the decision?
A 2.5% increase to Award pay rates This as usual, falls between the 3.5% requested by the ACTU and the zero increase requested by business lobby groups.
For anyone not covered by an award or an agreement, the new national minimum wage is $772.60 per week or $20.33 per hour
When does the increase apply?
The new national minimum wage applies from your first full pay period on or after 1 July 2021. This means if you have a weekly pay period that starts on a Monday, the new rates apply from Monday 5 July 2021. Most Modern Awards have been increased from the first full pay period on or after 1 July 2021, but with others to follow later in the year. For a full list of the Awards in each group please see this information from Fair Work.
Does Super increase as well?
Yes, the super guarantee will increase by 0.5% to 10% for eligible employees from 1 July 2021. From this date, employers must pay eligible employees super contributions of 10% of their ordinary time earnings. Further information on Super for employers is available from Fair Work Here
What does all this mean for your business?
Businesses should be aware of the Modern Awards that may apply to their employees and ensure wages are paid in accordance with them. Businesses will also have to make sure that employees on annualised salaries are not paid less than the amount the employee would have received under the applicable Modern Award. Note that businesses that fail to pay wages in accordance with the national minimum wage order or requirements of a relevant Modern Award may be exposed to liability for breach of the Fair Work Act 2009 which can result in heavy penalties.
Do you need a review of your Award classification and obligations? Contact us now for a Complimentary Discovery Session to talk through your options.