2018 Wage Increase Decision from Fair Work Commission

The Fair Work Commission recently handed down its annual decision on the new national minimum wage to begin 1 July 2018.

What do you need to do?

  1. Ensure you know the industrial instrument (modern award/agreement/award-free) and classification levels of each employee. Just because you pay them above the award rate does not mean that they are not award covered.
  2. Apply the pay increase from the first full pay period on or after 1 July 2018 for all award-covered employees.
  3. If award-covered employees are paid above the award rates, then you may look to apply a lower increase or absorb the increase in accordance with the applicable award clause.

Details of new Minimum Wage effective 1 July 2018

The Increase: 3.5%
The national minimum wage will increase by 3.5% from 1 July 2018, increasing wages to $719.20 per week, or $18.93 per hour, based on a 38-hour week. This is an increase of $24.30 per week.

Modern Awards
The adult minimum wages in modern awards will be increased by 3.5% from the first full pay period commencing on or after 1 July 2018. This increase may be absorbed into existing over-award payments, as per the absorption clause in the applicable modern award.

Award/agreement free employees
The national minimum wage is the minimum wage for all employees employed in Australia, including award/agreement free employees. The 3.5% increase also applies to the national minimum wage.

President’s comments
In handing down the decision, Fair Work Commission President Iain Ross commented that compared to the position at the time of last year’s review, the economic indicators now point more unequivocally to a healthy national economy and labour market. “The labour market has improved significantly with strong employment growth of some 355,200 workers over the year to April 2018.”

“Survey measures of overall business conditions are at their highest levels since the global financial crisis.  The real value of the national minimum wage has increased by 5.8% over the last decade and by 4.3% in the past five years.  However, this has not resulted in improvement to the actual or relative living standards of many categories of  national minimum wage and awards-reliant households due to changes in the tax transfer system. It has, however, provided an increase in the living standards of single adults,” FWC President, Iain Ross, said.

For help with identifying the correct award and classifications for your employees, and the appropriate wage increase, please contact Harrison Human Resources on 1300 001 447.

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