Increase to minimum wage in Australia

The Fair Work Commission (FWC) announced earlier this year that there would be an increase to the minimum wage in Australia, coming into effect on three different dates for different groups of industry awards.

The minimum wage has been increased to $753.80 per week or $19.84 per hour, an increase of 1.75%. This constitutes an increase of $13.00 per week, or 35 cents to the hourly rate. The increase will result in pay rises for more than two million Australians who are paid the minimum wage or have their pay set by awards that increase in line with the decision.

The FWC took a cautious approach in making the decision to increase the minimum wage by 1.75%, taking into consideration the current economic downturn and the significant rise in unemployment in response to COVID-19.  Whilst the minimum wage increase did not meet the union’s request of a 4% rise, the FWC recognised that without a rise many low-income householders would be less able to meet their needs and would be at greater risk of poverty.

The decision to implement the increase on three different dates for different industries is based on restrictions to contain COVID-19.

 

When will your award increase?

Group 1 Awards – from 1 July 2020

  • Frontline health care & social assistance workers
  • Teachers and child care
  • Other essential services

Group 2 Awards – from 1 November 2020

  • Construction
  • Manufacturing
  • A range of other industries

The National Minimum Wage increase 1.75% for Group 2 Awards should have taken effect from the first full pay period on or after 1 November 2020.

Group 3 Awards – from 1 February 2021

  • Accommodation and food services
  • Arts and recreation services
  • Aviation
  • Retail
  • Tourism

For a full list of awards in each group, click here to view the Fair Work website.

National Training Wage

The operative date of wage increases for employees undertaking a traineeship under the National Training Wage will be in accordance with the operative date minimum wages for the Group 1, Group 2 and Group 3 Awards.

 

What should you do?

Employers should review their wage arrangements and implement the necessary wage increases to ensure the new minimum wage rates are met for your specific industry award. All minimum payment obligation must be met for each employee, including those receiving the JobKeeper subsidy.

Those paying above-award payments should also review their wage arrangements to ensure they are high enough to accommodate the increases in minimum wage.

 

If you have any questions or would like assistance in reviewing your wage arrangements to accommodate for the increase to the minimum wage in Australia, please give us a call on 03 5443 0344 or email afs@afsbendigo.com.au.