Minimum Award Wage Increase

Minimum Award Wage Increase

The Fair Work Commission has announced the minimum wage decision to increase the National Minimum Wage rate to award rates of pay. The National Minimum Wage will be increased to $882.80 per week or $23.23 per hour, which is over $70 per week, and 5.75% increase to minimum award wages.

The new National Minimum Wage will apply from the first full pay period starting on or after 1 July 2023. This means if your weekly pay period starts on Monday, the new rates will apply from Monday, 3 July 2023.

How will it affect your business?

Any workers who are covered by a modern award and are paid the minimum award rates based on their classification, need to be reviewed to ensure you are meeting the minimum responsibilities and payroll obligations.

The increase doesn’t affect employees who already get paid more than their new minimum wage. If an employee is paid above the relevant modern award base rate of pay then provided, they are paid over-award payments, employers do not require to pay an additional increase as they would have met their obligation with respect to the minimum wage increase.

What happens next?

The FWC will issue draft determinations and orders about how this decision affects awards. It will then update the pay rates for each award.

Following this national wage increase, employers will be required to:

• Confirm the date the wage increase applies depending on the industry sector and award
• Review the wages of their employees to ensure they are not getting paid below the minimum wage and are better off overall (BOOT)
• Review the employment agreement to determine how they should handle the wage increase
• Ensure that processes are in place to implement the required changes
• Consult with employees to ensure that they are aware of changes that apply to them

In the event your employees are covered by an enterprise agreement, it is important to ensure that the base rates in those agreements remain at least equal to the new minimum Modern Award rates.

Aged Care – 15% increase to minimum wages

In other news, the Fair Work Commission has made a decision to increase minimum wages by 15% for some employees working in aged care. Please note this decision is separate to the Annual Wage Review. The Commission is the national workplace relations tribunal. They set minimum award pay rates and entitlements.

This increase applies to eligible employees covered by the:

• Aged Care Award: personal care workers (PCWs) and recreation/lifestyle activities officers
• Nurses Award: nursing assistants, enrolled nurses, registered nurses, nurse practitioners working in aged care
• SCHADS Award: home care workers working in aged care

It takes effect from the start of the employee’s first full pay period on or after 30 June 2023.

How can we help?

Our HR team can help employers by conducting a wage review to ensure you are compliant with the wages and pay.

For more information regarding the recent wage increase please contact Key Business Advisors on 1300 4 ADVICE.