Minimum wage increase – what you need to know

The Fair Work Commission annually reviews the National Minimum Wage.

They evaluate the current economic climate against submissions from both employee and employer groups before issuing a decision on minimum wages for the new financial year.

This year, the Commission has approved a 2.5 per cent increase, which came into effect on 1 July.

The National Minimum Wage will now be $20.33 per hour or $772.60 per week. This will cover all award or agreement free adult employees.

The 2.5 per cent increase will also be applied to the minimum pay rates across all Modern Awards. However, like last year, the increases will be rolled out in three stages.

For most awards, the increase took effect on 1 July. The notable delay being held for the General Retail Industry Award 2020. This increase came into effect on 1 September 2021.

Industry sectors that have been the most affected by the pandemic such as tourism, hospitality, fitness, arts, and live events will have the increase delayed until 1 November. The full award list can be viewed here.

These new updates and changes can be challenging to keep up with. That’s why we are here to help you navigate the ever-changing landscape of business legislation, without the fuss.

 

What is the minimum wage?

The minimum wage is the lowest hourly rate that an employer can pay to their employee. This was introduced under the Fair Work Act 2009.

For most employees, the minimum wage is set by the award covering the industry they work under.

There are different types of minimum wages depending on employment type, age, or work capacity. These include the pay rates of:

  • Apprentices and trainees,
  • Juniors, and
  • Employees with disabilities.

 

How will this impact businesses?

The national minimum wage increase will affect businesses and their employees in different ways.

For example, these are some important points to be aware of, and will differ per business:

  • Those not covered by an award or those currently being paid the minimum wage will be afforded the full minimum wage increase,
  • Junior rates will be different, as per the relevant award,
  • Businesses operating under registered agreements may need to check pre-set agreements carefully to determine how the changes will affect pay rates, and
  • Employees already being paid above the minimum wage, will not be affected.

 

How we can assist you with these changes

As an employer, the minimum wage increase is to be reflected in your payroll software when completing your business’ pay run. Our team can assist you with this transition, to ensure you’re properly allocating funds and managing your business’ finances.

Keeping up with legislative changes can be difficult, not to mention timely and unnecessarily expensive.

Our team of experts have got you covered to make this process easy. You can have peace of mind knowing that we will provide you with a stronger understanding of your obligations as the minimum wage increase comes into force.

With our knowledge we will help implement these changes quickly and efficiently, ensuring all your legal requirements are met. Contact us today to find out more about how we can help.