Fair Work Increases Minimum Wage, following cuts to Penalty Rates

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Fair Work Increases Minimum Wage, following cuts to Penalty Rates

The Fair Work Commission increases the minimum wage to combat changes to Penalty Rates.

Yesterday the Fair Work Commission announced that they will be increasing the National Minimum Wage by 3.3%.   This increase will take place as of July 1st 2017 and is expected to increase weekly wages by $22.20.   While this may seem like a small increase, 2.3 million people in Australia will benefit from this decision.

This decision follows on from another recent announcement surrounding the reduction of Penalty Rates.  In late February, the Fair Work Commission handed down its ruling on the long awaited decision on penalty rates.   The decision was to reduce Sunday and Public Holiday penalty rate provisions in some of the hospitality, restaurant and retail industries.

At the time, employers and employees were left in the dark about when these changes would take place.  On Monday the 5th of June, the Fair Work Commission announced when these changes to penalty rates would come into effect (listed below).  To combat the effect that the reduction in penalty rates will have to employees, Sunday penalty rates will be reduced over the next two to three years, varying on award.


Sunday Penalty Rates

Fast Food Award

In relation to the Fast Food Award, the Full Bench decided the transitional arrangements set out below were necessary to ensure that the award achieves the modern awards objective:

Full-time and part-time employees – Level 1 only

1 July 2017:    150 per cent  → 145 per cent
1 July 2018:    145 per cent  → 135 per cent
1 July 2019:    135 per cent  → 125 per cent

Casual employees (inclusive of casual loading) – Level 1 only

1 July 2017:    175 per cent  → 170 per cent
1 July 2018:    170 per cent  → 160 per cent
1 July 2019:    160 per cent  → 150 per cent

Hospitality Award

In relation to the Hospitality Award, the Full Bench decided the transitional arrangements set out below were necessary to ensure that the award achieves the modern awards objective:

Full-time and part-time employees

1 July 2017: 175 per cent  → 170 per cent
1 July 2018: 170 per cent  → 160 per cent
1 July 2019: 160 per cent  →  150 per cent

Retail Award

In relation to the Retail Award, the Full Bench decided the transitional arrangements set out below were necessary to ensure that the award achieves the modern awards objective:

Full-time and part-time employees

1 July 2017: 200 per cent  → 195 per cent
1 July 2018: 195 per cent  → 180 per cent
1 July 2019: 180 per cent  → 165 per cent
1 July 2020: 165 per cent  → 150 per cent

Casual employees (inclusive of casual loading)
1 July 2017: 200 per cent  →  195 per cent
1 July 2018: 195 per cent  →  185 per cent
1 July 2019: 185 per cent  →  175 per cent

Pharmacy Award

In relation to the Pharmacy Award, the Full Bench decided the transitional arrangements set out below were necessary to ensure that the award achieves the modern awards objective:

Full-time and part-time employees

1 July 2017 200 per cent  → 195 per cent
1 July 2018 195 per cent →  180 per cent
1 July 2019 180 per cent →  165 per cent
1 July 2020 165 per cent →  150 per cent

Casual employees (inclusive of casual loading)

1 July 2017 225 per cent →  220 per cent
1 July 2018 220 per cent →  205 per cent
1 July 2019 205 per cent →  190 per cent
1 July 2020 190 per cent →  175 per cent

Public Holiday Penalty Rates

The Fair Work Commission has also ruled that Public Holiday Rates will be reduced.  This decision will affect the Hospitality, Restaurant, Fast Food, Retail and Pharmacy Awards.

  • Full-time & Part time staff will see there public holiday rates reduced from 250% to 225%.
  • Casual staff will see the public holiday rates reduced from 275% to 250%

Changes to public holiday rates will take place on the 1st July 2017, without any transitional periods.

If you would like further information regarding this article, or have questions regarding penalty rates that may apply to your business, contact us on: 1300 717 721

 

To read the Summary of the Fair Work Commission’s decision, please click on the link below:

https://www.fwc.gov.au/documents/sites/awardsmodernfouryr/2017fwcfb3001-summary.pdf

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