Reminder for employers about wage increases

Posted by on Jun 21, 2018

As we come to the end of this financial year, we remind employers that some of you may very soon be required to increase wages for your employees. Are you one of those employers? Read on to consider whether this legal obligation affects you.

If you are an employer who pays:

• the minimum wage to your award/agreement free employees; or

• modern award minimum wages to your award covered employees,

then you need to review and increase your current pay rates in light of the recent Annual Wage Review decision (the Decision).  The Decision was handed down by the Fair Work Commission’s Expert Panel earlier this month.

Minimum wage

The national minimum wage for award/agreement free employees has been increased by 3.5%. It will now be $719.20 per week or $18.93 per hour for adult workers.

A lower special national minimum wage applies for junior employees (those aged under 21 years) and the amount depends on the age of the employee.  There are also special minimum wages for employees to whom training arrangements apply and employees with a disability.

The casual loading remains at 25%.

Award minimum wages

If your workplace is covered by an award and you pay your employees award minimum wages, these minimum wages have also been increased by 3.5%.

Some employers pay slightly above, but close to, award minimum wages.  If you pay wages close to the award minimum, you should also review your pay rates against the new award wages to ensure you are still paying at or above the minimum rate of pay.

This increase to modern award minimum wages also applies to junior employees, employees to whom training arrangements apply and employees with a disability.  The casual loading for award employees remains at 25% (other than the Business Equipment Award casual loading which has been increased to 23%).

If you pay well above modern award minimum wages, then the Decision will not affect you.

Timing

The wage increases take effect from the first full pay period after 1 July 2018. From that time, if you are an affected employer, you will have an obligation to pass on the increase.  Penalties apply if employees are underpaid.

Should you have any questions about these changes, please contact Magda Marciniak or the team at Justitia.