Now is a good time to make sure you are meeting (or being paid!) your minimum pay obligations!  The Fair Work Commission handed down its Annual Wage Review decision on 16 June. The FWC Panel decided to increase the National Minimum Wage and all modern award rates of pay by 2.5% in the new financial year. The FWC:
• noted that, in contrast to the economic uncertainty of last year, the Australian economy has recovered to a greater extent and more quickly than anticipated;
• considered the risk of domestic outbreaks and on-going disruptions to other major economies;
• took into account the scheduled 0.5% increase in the Superannuation Guarantee rate as of 1 July;
• overall considered the markedly better economic environment weighed in favour of a higher increase than the 1.75% increase awarded in a split decision last year.

In once again staggering the increase across different industries, the Commission observed that the expected pattern of future lockdowns is likely to have particular adverse impact on hairdressing and beauty services, gyms, many retail stores, accommodation and many hospitality businesses and businesses in the tourism and entertainment/sport sectors.

This means that the federal weekly minimum full time wage will increase from 1 July 2021 by $18.80 per week to $772.60 ($20.33 per hour) from $753.80 ($19.84 per hour). Modern award rates of pay will increase by this amount or more and allowances will also be affected.

Like last year, award increases will take effect on different dates depending on the effects of Covid19 according to different award groupings. Most modern award increases will apply from 1 July 2021. However, increases in the retail sector will apply from 1 September 2021 and increases in the most economically affected sectors including aviation, arts and events, fitness, hair and beauty, hospitality, some retail, clubs and tourism will take effect from 1 November 2021. It is important to check your particular award for commencement of the increase.

A summary of the Commission’s decision can be found at FWC Annual Wage Review 2020-2021 Summary of Decision. Employers should check the Fair Work Commission website for pay rate revisions to their particular modern award/s and implementation dates. You can also subscribe to electronic award updates from the Commission. The Fair Work Ombudsman also has online pay checking resources (

Remember that employees cannot be paid less than required by an applicable modern award (including overtime, penalty rates and allowances). 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. 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.  Care also needs to be taken in relation to annualised wage and common law salary arrangements given the FWC’s tightening of award requirements in this area (see our bulletin Are you up to date with award annualised wage changes?).

Also, from 1 July 2021, the compulsory employer Superannuation Guarantee rate will increase from 9.5% to 10%.  Finally, the unfair dismissal high income threshold (the annual remuneration level, above which award free employees cannot bring unfair dismissal claims) will increase to $158,500 (from $153,600 and excluding superannuation and non guaranteed amounts, eg commission) and the maximum compensation for unfair dismissals will increase to $79,250.00. Please contact us if you would like any further information or help.