On 30 May 2019 the Fair Work Commission handed down its decision regarding an increase to the National Minimum Wage. The Commission determined that it was appropriate to increase the minimum wage by 3%.
The national minimum wage will increase to $740.80 per week, or $19.49 per hour. This constitutes an increase of $21.60 per week to the weekly rate or 57 cents per hour to the hourly rate. Weekly wages will be rounded to the nearest 10 cents.
As a result of the decision, minimum rates of pay in Modern Awards will also increase by 3%. The increases take effect from the first full pay period commencing on or after 01 July 2019.
WHAT DOES THIS MEAN FOR EMPLOYERS?
Employers whose businesses are covered by a modern award (occupational or industry specific), and pay their employees in line with award rates of pay will need to increase employee pay rates accordingly from the first full pay period commencing on or after 01 July 2019.
Employers with an Enterprise Agreement in place may already pay their employees above the minimum rates of pay prescribed in the equivalent Modern Award/s. Although this may be the case, Harrison Human Resources urges Employers who have an Enterprise Agreement in place to ensure the base rates of pay in their Agreement do not fall below the base rates of pay in the equivalent Modern Award as a result of the increase.
WHERE DO I FIND UPDATED AWARD RATES OF PAY?
Employers will be able to access updated Modern Award pay guides via the Fair Work website www.fairwork.gov.au. Fair Work team is currently working to update the current pay guides to reflect the increase. It is anticipated this process will be completed prior to 1 July 2019.
DO I HAVE TO INCREASE PAY RATES?
It is important that employers review the wage increases in accordance with their industrial instruments and contracts of employment, as some may have an obligation to pass on the increase even if they are paying above Award rates of pay.
After assessing the new rates of pay, there may be some circumstances where an employer is still paying above Award. If a contract does not provide an obligation to the employer to pass the increase on, the employee’s above Award wage will simply absorb the increase in their current rate of pay and no change will be required.
Employers should also ensure that any annualised salary arrangements made under a Modern Award are reviewed in accordance with the obligations set out in the Award.
Harrison Human Resources offers a Pay and Award Audit where we will check to ensure you are using the correct Award/s, classified positions correctly, and meeting your minimum Award pay rates and other obligations. As well, we will develop employment contracts and individual flexibility agreements to suit the specific needs of your business.
If you have any questions regarding the minimum wage increase, how the increase may impact wage rates in your enterprise agreement, or about any of the above information, please contact Harrison Human Resources on 1300 544 803 or via email at email@example.com. We specialise in HR Consulting with 20 plus years’ experience across various industries.