Now is a good time to make sure you are meeting (or being paid!) your minimum pay obligations. Minimum wages increased from 1 July 2017 as a result of the Fair Work Commission’s recent decision to award a minimum wage increase of 3.3%. This means the federal weekly minimum full time wage will increase by $22.20 per week to $694.90 ($18.29 per hour) from $672.70 ($17.70 per hour) and modern award rates of pay will increase by this amount or more. The Commission took into account several factors including that:
- generally positive economic indicators gave an opportunity to improve the relative living standards of the low paid (whilst acknowledging the increase would not lift all award reliant employees out of poverty); and
- international research reinforced the view that modest and regular wage increases do not result in disemployment effects.
A summary of the Commission’s decision can be found at FWC Annual Wage Review Statement 2016-17. Employers should check the Fair Work Commission website (http://www.fwc.gov.au) for pay rate revisions to modern awards and ensure the appropriate increase is passed on from the first pay period after 1 July 2017. You can also subscribe to electronic award updates from the Commission. The Fair Work Ombudsman also has online pay checking resources (http://www.fairwork.gov.au/pay).
For award based employees, the increase can be absorbed by a standard higher pay rate where there is specific contractual agreement between an employer and employee. For non award employees, the obligation is for employers to ensure that an employee is being paid more than the minimum wage rate for all their hours of work. It is only trainees, apprentices and junior employees, employees to whom training arrangements apply and employees with a disability who may be paid less than these minimum rates and then only if specified in an applicable award or enterprise agreement.
Also, from 1 July 2017, the unfair dismissal high income threshold (the maximum annual remuneration level for award free employees to bring an unfair dismissal claim) increased to $142,000 (from $138,900 and excluding superannuation and non guaranteed amounts, eg commission) and the maximum compensation for unfair dismissals increased to $71,000.
Please contact us if you would like further information or help.