The Fair Work Commission (FWC) has announced a 3% increase to minimum wages. The increase will apply from the first full pay period starting on or after 1 July 2019.
Employers should start reviewing their employee’s current pay rates and preparing for the increase. Now is a perfect time for employers to roll out new employment contracts or review and update existing employment contracts.
The increase only applies to employees that get their pay rates from the national minimum wage, a modern award or in some cases a registered agreement.
Award Free Employees
The new national minimum wage will be $740.80 per week or $19.49 per hour. The national minimum wage applies to employees who aren’t covered by a modern award or registered agreement.
Award Covered Employees
Most employees are covered by a modern award. Modern award rates will increase by 3%.
If an employee is already paid above the modern award, employers may be able to absorb the increase. However, employers will need to ensure that the employee’s wage is at least equal to or better off overall compared to the employee’s minimum entitlements under the modern award.
If a registered agreement applies to the workplace, employers will need to ensure the minimum base rates in the agreement remain at least equal to the modern award rates. If not, the agreement rates will need to be increased to match the new modern award rates.
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This article is intended for information purposes only and should not be regarded as legal advice. Please contact Industry Legal Group for specific legal advice before taking any action.
Current as at 1 June 2019.