The Fair Work Commission has announced today an increase to the National Minimum Wage of 5.2%, and a minimum increase of $40 per week to apply to full-time employees covered by a modern award.

The effect of the increase will mean that the National Minimum Wage will increase by $40 per week, from the current $772.60 per week ($20.33 per hour) to $812.60 per week ($21.38 per hour).  The 5.2% increase will take effect from 1 July 2022.

Modern award wages will be increased by 4.6%, subject to there needing to be a minimum increase of $40 per week for all classifications. This means that award wage rates for full-time employees paid above $869.60 per week will increase by 4.6% and full-time employees paid below $869.60 per week will have their wages increase by $40 per week.

For most modern awards, the increase will take effect on 1 July 2022. However, in recognition of the economic impacts to particular industries, the below group of modern awards will have a delayed operative date for the increase, with the increase taking effect from 1 October 2022:

1. Aircraft Cabin Crew Award 2020;
2. Airline Operations – Ground Staff Award 2020;
3. Air Pilots Award 2020;
4. Airport Employees Award 2020;
5. Airservices Australia Enterprise Award 2016;
6. Alpine Resorts Award 2020;
7. Hospitality Industry (General) Award 2020;
8. Marine Tourism and Charter Vessels Award 2020;
9. Registered and Licensed Clubs Award 2020; and
10. Restaurant Industry Award 2020.

The increase was the subject of much debate in the recent Federal election campaign. In referencing record-high inflation of 5.1%, the Albanese Government delivered on its promise to advocate to the FWC that the Commission “ensures that the real wages of Australia’s low-paid workers do not go backwards.”

Whilst a number of factors were considered, the Commission flagged that the “most significant changes since last year’s Review decision have been the sharp rise in the cost of living and the strengthening of the labour market”.  The Commission then went on to note that the “low paid are particularly vulnerable in the context of rising inflation”.  This appears to have weighed heavily on the decision to impose a significant increase to low paid employee wages.

Aitken Legal encourages employers to check the minimum rates of modern awards relevant to their business, and where the minimum rate is being paid, ensure that the increase is passed on to avoid underpayment.

It is also essential that Employers review pay rates for employees currently receiving over-Award payments, or engaged under Enterprise Agreements, to ensure that they do not underpay their employees when compared against the revised national minimum wage or award rates, and/or continue to comply with the remuneration provisions of the Enterprise Agreement.

Contact Aitken Legal for any enquiry about the wage increase and its application to remuneration arrangements, including through modern awards and Enterprise Agreements.