Reminder for employers about wage increases

Posted by on Jul 1, 2020

As we commence the new 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 on 19 June 2020.

Minimum wage

The national minimum wage for award/agreement free employees has been increased by 1.75%. It will now be $753.80 per week or $19.84 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 1.75%.

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%.

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

Timing

Due to the impact of COVID-19 and government efforts to prevent the spread of the virus, the Fair Work Commission felt that there were exceptional circumstances to justify deferring the wage increases in certain industries. As a result, the 1.75% increase to the national minimum wage and minimum rates in awards will be carried out in three stages.

Group

Wage increase takes effect from the start of the first full pay period on or after the date below

National minimum wage/Group 1 Awards

1 July 2020

Group 2 Awards

1 November 2020

Group 3 Awards

1 February 2021

The full list of awards categorised as Group 1, Group 2 or Group 3 can be found at the end of this blog post.

If you are an affected employer, you will have an obligation to pass on the increase on the relevant date worked out in accordance with table above. Penalties apply if employees are underpaid.

Group 1 Awards – 1 July 2020

This group covers industries and sectors less affected by the pandemic, and those covering frontlineworkers and other essential services:

  • Aboriginal Community Controlled Health Services Award 2020;
  • Aged Care Award 2010;
  • Ambulance and Patient Transport Industry Award 2020;
  • Banking, Finance and Insurance Award 2020;
  • Cemetery Industry Award 2020;
  • Children’s Services Award 2010;
  • Cleaning Services Award 2020;
  • Corrections and Detention (Private Sector) Award 2020;
  • Educational Services (Schools) General Staff Award 2020;
  • Educational Services (Teachers) Award 2010;
  • Electrical Power Industry Award 2020;
  • Fire Fighting Industry Award 2020;
  • Funeral Industry Award 2010;
  • Gas Industry Award 2020;
  • Health Professionals and Support Services Award 2020;
  • Medical Practitioners Award 2020;
  • Nurses Award 2010;
  • Pharmacy Industry Award 2020;
  • Social, Community, Home Care and Disability Services Industry Award 2010;
  • State Government Agencies Award 2020; and
  • Water Industry Award 2020.

Group 2 Awards – 1 November 2020

This group covers industries and sectors that do not fall within Groups 1 and 3:

  • Aluminium Industry Award 2020;
  • Animal Care and Veterinary Services Award 2020;
  • Aquaculture Industry Award 2020;
  • Architects Award 2020;
  • Asphalt Industry Award 2020;
  • Australian Government Industry Award 2016;
  • Black Coal Mining Industry Award 2010;
  • Book Industry Award 2020;
  • Broadcasting, Recorded Entertainment and Cinemas Award 2010;
  • Building and Construction General On-site Award 2010;
  • Business Equipment Award 2020;
  • Car Parking Award 2020;
  • Cement, Lime and Quarrying Award 2020;
  • Clerks—Private Sector Award 2020;
  • Coal Export Terminals Award 2020;
  • Concrete Products Award 2020;
  • Contract Call Centres Award 2020;
  • Cotton Ginning Award 2020;
  • Dredging Industry Award 2020;
  • Educational Services (Post-Secondary Education) Award 2020;
  • Electrical, Electronic and Communications Contracting Award 2010;
  • Food, Beverage and Tobacco Manufacturing Award 2010;
  • Gardening and Landscaping Services Award 2020;
  • Graphic Arts, Printing and Publishing Award 2010;
  • Higher Education Industry-Academic Staff-Award 2020;
  • Higher Education Industry-General Staff-Award 2020;
  • Horticulture Award 2010;
  • Hydrocarbons Field Geologists Award 2020;
  • Hydrocarbons Industry (Upstream) Award 2020;
  • Joinery and Building Trades Award 2010;
  • Journalists Published Media Award 2020;
  • Labour Market Assistance Industry Award 2020;
  • Legal Services Award 2020;
  • Local Government Industry Award 2020;
  • Manufacturing and Associated Industries and Occupations Award 2020;
  • Marine Towage Award 2020;
  • Maritime Offshore Oil and Gas Award 2020;
  • Market and Social Research Award 2020;
  • Meat Industry Award 2020;
  • Mining Industry Award 2020;
  • Miscellaneous Award 2020;
  • Mobile Crane Hiring Award 2010;
  • Oil Refining and Manufacturing Award 2020;
  • Passenger Vehicle Transportation Award 2020;
  • Pastoral Award 2010;
  • Pest Control Industry Award 2020;
  • Pharmaceutical Industry Award 2010;
  • Plumbing and Fire Sprinklers Award 2010;
  • Port Authorities Award 2020;
  • Ports, Harbours and Enclosed Water Vessels Award 2020;
  • Poultry Processing Award 2020;
  • Premixed Concrete Award 2020;
  • Professional Diving Industry (Industrial) Award 2020;
  • Professional Employees Award 2020;
  • Rail Industry Award 2020;
  • Real Estate Industry Award 2020;
  • Road Transport (Long Distance Operations) Award 2020;
  • Road Transport and Distribution Award 2020;
  • Salt Industry Award 2010;
  • Seafood Processing Award 2020;
  • Seagoing Industry Award 2020;
  • Security Services Industry Award 2020;
  • Silviculture Award 2020;
  • Stevedoring Industry Award 2020;
  • Storage Services and Wholesale Award 2020;
  • Sugar Industry Award 2020;
  • Supported Employment Services Award 2020;
  • Surveying Award 2020;
  • Telecommunications Services Award 2010;
  • Textile, Clothing, Footwear and Associated Industries Award 2010;
  • Timber Industry Award 2010;
  • Transport (Cash in Transit) Award 2020;
  • Waste Management Award 2020; and
  • Wool Storage, Sampling and Testing Award 2010.

Group 3 Awards – 1 February 2020

This group covers industries which have been most adversely affected by the pandemic:

  • Air Pilots Award 2020;
  • Aircraft Cabin Crew Award 2020;
  • Airline Operations-Ground Staff Award 2020;
  • Airport Employees Award 2020;
  • Alpine Resorts Award 2020;
  • Amusement, Events and Recreation Award 2020;
  • Commercial Sales Award 2020;
  • Dry Cleaning and Laundry Industry Award 2020;
  • Fast Food Industry Award 2010;
  • Fitness Industry Award 2010;
  • General Retail Industry Award 2010;
  • Hair and Beauty Industry Award 2010;
  • Horse and Greyhound Training Award 2020;
  • Hospitality Industry (General) Award 2020;
  • Live Performance Award 2010;
  • Mannequins and Models Award 2020
  • Marine Tourism and Charter Vessels Award 2020;
  • Nursery Award 2020;
  • Professional Diving Industry (Recreational) Award 2020;
  • Racing Clubs Events Award 2010;
  • Racing Industry Ground Maintenance Award 2020;
  • Registered and Licensed Clubs Award 2010;
  • Restaurant Industry Award 2020;
  • Sporting Organisations Award 2020;
  • Travelling Shows Award 2020; and
  • Vehicle Repair, Services and Retail Award 2020.

Nicola Martin is a lawyer at Justitia. To view Nicola’s profile, click here.