In June 2022, the Fair Work Commission announced a 5.2% increase to the national minimum wage and a 4.6% rise to award minimum wages, subject to a minimum increase for adult award classifications of $40 per week.
This two-tiered approach aimed to protect the real value of wages of the lowest paid workers. It took into consideration the sharp rise in the cost of living, including the outlook for inflation, and the strengthening of the labour market.
Considering the economic conditions, the erosion of the real value of wages and the reduction in living standards, President Ross stated “The Panel concluded that the changes in the economic context weigh in favour of an increase in the national minimum wage and modern award minimum wages.”
While the wage increase applied to the majority of Awards, the Panel believed exceptional circumstances existed for the following Awards, delaying the wage increase for them until 1 October 2022:
Aviation
- Air Pilots Award [MA000046]
- Aircraft Cabin Crew Award [MA000047]
- Airline Operations – Ground Staff Award [MA000048]
- Airport Employees Award [MA000049]
- Airservices Australia Enterprise Award 2016
Hospitality
- Hospitality Industry (General) Award [MA000009]
- Registered and Licensed Clubs Award [MA000058)
- Restaurant Industry Award [MA000119]
Tourism
- Alpine Resorts Award [MA000092]
- Marine Tourism and Charter Vessels Award [MA000093]
What is the Modern Award Minimum Wage increase for these Awards?
Like the others, the minimum wage rates in these awards will increase by 4.6% for all wage rates above $869.60 per week.
Wage rates below $869.60 per week will be adjusted by $40 per week – an increase of $1.05 per hour.
For example:
A restaurant employee – level 1 has a current weekly pay rate of $794.80. As the weekly rate is below $869.60, it will be increased by $40.00 per week to $834.80 per week. This equates to a new hourly rate of $21.97, an increase of $1.05.
A restaurant employee – level 5 has a current weekly pay of $955.90 or $25.16 per hour. As this rate is above $869.90, the 4.6% increase will apply. The new weekly rate is $999.90 or $26.31 per hour.
When does the increase take effect?
For the above Awards, the increases will take effect on the first full pay period on or after 1 October 2022.
To consider:
- Employers who currently pay above the minimum wage rates may not have to increase employees’ rates of pay. It is important to review and ensure that employee rates remain at least at the minimum after the increase.
- Employers who pay under annualised salary arrangements should conduct an audit to ensure the arrangements compensate for the award entitlements.
- Employers who pay under enterprise agreements should ensure the base rates in those agreements remain at least equal to the new minimum award rates.
HR Central have a team of dedicated HR Specialists who can work with you to ensure your compliance with the wage increase, as well as all other HR related matters such as; contracts, record keeping, award interpretation and performance management.
We look forward to hearing from you!
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