NEWSFLASH: National Minimum Wage increases by 3%

Fair Work Decides

Yesterday, the Fair Work Commission handed down its Annual Wage Review 2018-19 decision, for Australian employees whose wage is determined by the National Minimum Wage (NMW) and Modern Awards.  The upshot is that employees whose wages are determined by the National Minimum Wage (eg. Award-free employees covered by the National Employment Standards) or the relevant Modern Award, will have their minimum wages increased by 3%, effective from the first full pay period on or after 1 July 2019.

Considerations

In its decision, the Fair Work Commission Panel considered the following factors:

  • Despite a fall in GDP growth, the ecomony and labour continue to perform strongly, with the proportion of working-age population who are in employment being at record levels;
  • Given this, the Commission considered that there exists an opportunity to improve the relative living standards of the low pad, by awarding a real increase in wages;
  • In particular, the Commission considered that women are disproportionately represented amongst those on the minimum wage.  As such, an increase in the minimum wage will ‘assist in reducing the gender pay gap’; and
  • The decision to award a lower increase this year than those awarded in previous years reflects the changes in economic conditions (such as the drop in GDP growth and drop in inflation).

The decision in full is also available from the Fair Work Commission website.

What does this mean for employers?

  • If your employees are covered by a Modern Award, ensure that you download the new Award Pay Guide relevant for your Modern Award, prior to 1 July 2019.  These are usually available for download from mid-June, from the Fair Work Ombudsman websiteFor our Seed HR Hub and retainer clients, we wil contact you directly when your Pay Guides have been updated and are available;
  • If your employees are covered by a Modern Award and you pay ‘above Award rates’, we recommend that you check the new Minimum Wages to ensure that your ‘above Award rates’ are still sufficient to ensure your compliance with the Award;
  • If your employees are Award-free, we recommend that you check that your adult employees are being paid at least the new National Minimum Wage, which is $19.49 per hour (or $24.36 for casual employees);
  • If your business usually operates under the principles of CPI increases for annual wage increases beyond the minimum wage, the Australian CPI increase to March quarter 2019 was 1.3%.

 

Our Seed HR Hub offers resources to employers to assist with Award and legislative compliance, record keeping requirements and payslip information. Click Here to sign up today!

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