Minimum Wage Review

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It is that time of the year again where Fair Work Australia review current Award rates and set the National Minimum wage for Award-free employees.

It is imperative that all employers, whose employees are subject to an Award, review current wage rates set by Fair Work Australia to ensure that they are meeting minimum pay requirements for all employees and are complying with Award provisions in relation to matters such as penalties, loadings and allowances.  Award-free employees must be remunerated to satisfy the National minimum wage requirements.

All new pay rates apply from 1 July 2012.

The National Minimum Wage Order 2012 set the following wages for Award free employees:

  • National minimum wage—of $606.40 per week, calculated on the basis of a week of 38 ordinary hours, or $15.96 per hour.
  • Casual loading—of 23 per cent.

The National Minimum Wage Order also sets rates for employees with disability, junior employees, apprentices and trainees.

Fair Work Australia increased the minimum wage in modern awards by 2.9%. Penalty rates and loadings in modern awards are often a percentage of the base hourly rate. For example, rates for working on a Saturday could be time and a half, or an extra 50% on top of the base rate. Any change to the base rate of pay therefore flows through to the penalty rates and loadings as well.

Work-related allowances (such as industry allowances) in modern awards are a percentage of the ‘standard rate’ in the award. The standard rate is defined in each modern award and is usually the weekly minimum rate of pay for a certain classification. Since the annual wage review increases the standard rate, this will also flow through to any work-related allowances.

Employers who already pay their employees above the minimum Award rate are not obliged to increase employees’ pays, as long as their pay stays above the base pay rate in the relevant modern award.

Employees subject to an Enterprise Bargaining Agreement should have wage rise provisions contained in the Agreement. For those engaged on Agreements which have expired but still continue to run, then they will need to ensure that they meet the minimum pay rates set in this wage review.

If you need assistance determining Award coverage and complying with Award conditions, we can help.

 

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