What does the minimum wage increase mean for your business?
On July 1, 2020, the Fair Work Commission announced an increase to the national minimum wage for Australian workers.
The increase was rather modest at 1.75%. This means the previous minimum wage of $19.49 or $740.80 per week, has been increased to $19.84 per hour or $753.80 per week.
The announcement followed the Commission’s Annual Wage Review. This increase mostly applies from the first full pay period starting on or after July 1, 2020. This will differ for various awards schemes.
What does the Fair Work Ombudsman have to say?
Fair Work Ombudsman Sandra Parker has stated that all Australian workplaces are expected to ensure all their employees are paid at least the new minimum wage, in line with the Fair Work Commission’s decision.
How will you be supported?
The Fair work Ombudsman has released online tools to assist you through this process as seamlessly as possible.
“The Fair Work Ombudsman has free online tools available to help employers comply with their workplace obligations, which have been updated to reflect the new pay rates,” Sandra Parker said of the small business support offered.
“We urge all businesses to use our Pay and Conditions Tool to check the lawful minimum rates they need to pay their staff, or to contact us directly for free assistance.”
Parker urges all employers to make good use of the free tool to double check their rates of renumeration carefully and ensure lawful compliance.
If you require further updates, make sure you subscribe to Fair Work announcements for the latest workplace information. You can simply subscribe to announcements specifically relevant to your business.
What about JobKeeper?
With JobKeeper still in play, there’ll be an appreciable impact on the minimum wage increase.
Essentially, if your employees have qualified and been awarded JobKeeper payments, these still apply.
Only if your employees are not currently being paid under JobKeeper and are instead working under regular awards or minimum wages, will this increase apply.
What about employees on awards?
Although these minimum wage changes have been applied across the board, there’ll be differences between various award schemes, in terms of when they’ll be rolled out across various industries.
What are the different awards and how do they differ?
- Group one awards such as frontline heath care and social assistance workers, teachers and child-care, alongside other essential services, will increase as per normal from July 1, 2020.
- Group two awards such as construction, manufacturing and many other industries will delay the wage increase until November 1, 2020.
- Group three awards including accommodation and food services, arts and recreation, aviation, retail and tourism will have the latest applied increase from February 1, 2021.
If you’re looking for a specific lists of awards to ascertain when the minimum wage will increase, check this page.
If workers are unsure which award applies to them, they can use the Find my award tool.
There are, of course, a few different reactions from the business community, employees and their representatives.
The wage increase itself will benefit more than 2.2 million Australian workers and assist an ailing economy during the first recession Australia has faced in decades. Yet the benefit will not be impressive in scale.
For example, the secretary of the Australian Council of Trade Unions, Sally McManus, has stated that the increase was “very modest” and “it is disappointing that several awards will not see any increase until November or February”.
On the other side of the coin, small businesses are at a time of unprecedented strain as well. With small businesses the most likely to be paying employees minimum wage, this sector will be clearly the most impacted.
But despite the untimely added load on small business employers, the Fair Work Commission put forward the argument that if it did not increase minimum wages, some families could be forced into poverty.
It can be said that despite the increase, it’s a very modest one. A modest increase, while not being of a huge advantage to employees, will also not represent a huge burden on small businesses during a contentious time of strain.