This year’s Annual Wage Review has resulted in the decision to increase the national minimum wage by 2.5%
The Commission’s President, Iain Ross said the decision had been made based on the “markedly better” economic climate this year.
Explaining the decision, Iain stated, “..there was a broad consensus in the submissions before us that the current performance of the economy has exceeded expectations and that the economic recovery is well underway.”
The minimum wage decision affects at least 2.2 million workers whose pay is linked to it.
The Annual Wage Review takes into account the Super Guarantee increase which takes effect from 1 July 2021. The Review also takes into account the removal of the $450 per month eligibility threshold for mandatory superannuation contributions.
The modern award minimum wages have also been increased by 2.5%, however, industries hard-hit by the COVID-19 pandemic have been afforded some relief under the Annual Wage Review with the increase in particular Award rates operating from a date later than 1 July 2021.
What does the this mean?
Minimum wage refers to gross pay – or pay pre tax.
All employees working in Australia are entitled to the minimum wage. It is illegal to pay under the minimum wage.
The hourly rate is calculated on the basis of the 38-hour week for a full-time employee.
When will the wage increase be introduced?
As per 2020, the increase has grouped awards with staggered increase dates, specifically for those industries most significantly affected by the COVID 19 downturn.
What does the wage increase equate to – monetarily?
- The minimum wage will increase to; $772.60 PER WEEK.
- This equates to; $20.33 PER HOUR.
- The total increase equates to an additional;
- $18.80 PER WEEK
- $0.49 PER HOUR
Which awards are affected and when does the increase initiate?
- The increase initiates on 1 July 2021.
- All Awards increase on 1 JULY 2021 – with the exception of the below:
- The below awards will NOT increase until SEPTEMBER or NOVEMBER 2021:
- 1 September 2021:
- General Retail Industry Award 2020
- 1 November 2021: (see list below)
- Air Pilots Award 2020
- Aircraft Cabin Crew Award 2020
- Airline Operations – Ground Staff Award 2020
- Airport Employees Award 2020
- Airservices Australia Enterprise Award 2016
- Alpine Resorts Award 2020
- Amusement, Events and Recreation Award 2020
- Dry Cleaning and Laundry Industry Award 2020
- Fitness Industry Award 2020
- Hair and Beauty Industry Award 2010
- Hospitality Industry (General) Award 2020
- Live Performance Award 2020
- Mannequins and Models Award 2020
- Marine Tourism and Charter Vessels Award 2020
- Nursery Award 2020
- Racing Clubs Events Award 2020
- Racing Industry Ground Maintenance Award 2020
- Registered and Licensed Clubs Award 2020
- Restaurant Industry Award 2020
- Sporting Organisations Award 2020
- Travelling Shows Award 2020
- Wine Industry Award 2020.
- 1 September 2021:
Unless the award your employees fall under, is listed above for an increase at 1 SEPTEMBER or 1 NOVEMBER, the 2.5% national minimum wage increase – must be paid to all other awards from the first pay cycle on or after 1st July 2021.
Also for consideration:
- Employers who currently pay above National Minimum Wage or Award rates of pay are not obliged by this decision to increase their rates of pay. However, employers need to ensure their rates remain at least as beneficial, once the increase is applied.
- If you pay any of your employees under annualised salary arrangements, you will need to conduct an audit of those annualised salaries against the new Award rates and working patterns to ensure the annual salary compensates for award entitlements.
- Employers who pay under enterprise agreements should ensure that the base rates in those agreements remain at least equal to the new minimum Modern Award rates.
If you need support or advice, give us a call to make sure you are compliant with Fair Work Australia’s Annual Wage Increase.