National Minimum Wage Increase

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The Fair Work Commission (‘FWC’) has set the National Minimum Wage increase to 1.75% and categorised the Modern Awards into three groups for a staged roll out. This means that not every industry will be required to increase wages by 1.75% come 1 July 2020. The staged roll out of the National Minimum Wage will occur over several months commencing on 1 July 2020 and ending on 1 February 2021.

When compared with the recent years National Minimum Wage increases between 3-3.5%, the increase percentage has nearly halved from 3% in 2019 down to 1.75% 2020.

The FWC heavily considered the impacts the coronavirus pandemic has had and will continue to have, on Australia’s economy when setting the National Minimum Wage increase. By having an increase that is smaller than the previous years and in a staged approached, the FWC intended that this approach will be easier for businesses to manage, give the industries most impacted additional time to recover before being required to implement the increase and therefore hopefully have as little impact as possible on employment rates.

The FWC has stated that the first group to receive the wage increase will consist of those industries that have continued working during the pandemic, the ones that have been working to keep the community safe and to protect the vulnerable and those at most risk. This includes our frontline health care and social assistance workers, teachers and childcare workers and employees engaged in other essential services.

From 1 July 2020 the increase will take effect for Group 1 Awards:

  • Teachers and Child Care,
  • Frontline Health Care & Social Assistance Workers
  • Other essential services (Fire Fighting Industry, Banking, Financial and Insurance industries, Cleaning industries, Corrections and Detentions, Power and Energy services)

From 1 November 2020 the increase will take effect for Group 2 Awards:

  • Manufacturing
  • Constructions
  • A range of other industries (Mining, Professional Services, Transport, Seafood, Poultry and Meat industries)

From 1 February 2021 the increase will take effect for Group 3 Awards:

  • Arts and Recreation Services
  • Accommodation and Food Services
  • Retail
  • Aviation
  • Tourism

To view the full list of Awards for each Group please visit: https://www.fairwork.gov.au/about-us/news-and-media-releases/website-news/the-commission-has-announced-a-1-75-increase-to-minimum-wages

If you have any questions regarding any of the information above or would like to discuss your relevant Award(s) in more detail, please don’t hesitate to contact our Employment Law team on (02) 4927 2900

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