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Fair Work Commission announces 3.75% increase to the national minimum wage and award wages

By Meaghan Bare, Michael Nicolazzo, and Patrick Kelly

• 19 June 2024 • 3 min read
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On June 3, 2024, the Fair Work Commission announced a 3.75% increase to the national minimum wage and minimum award wages. This equates to around a $33 per week increase to the minimum wage for a full-time employee. It is crucial for employers to ensure employees are paid at least the relevant minimum wage so that they avoid getting wage rates wrong and potentially incurring significant penalties under federal or state law.

What submissions were made to the Fair Work Commission?

The Australian Council of Trade Unions had proposed a 5% increase (with 9% for selected occupation industries such as care and degree-qualified work to reflect high numbers of female employees in line with the Fair Work Commission’s gender equality priorities) while the Australian Chamber of Commerce and Industry, Australian Industry Group, and a number of other employer bodies had proposed an increase to minimum wages of between 2% and 3%. The Federal Government had submitted that the Fair Work Commission should ensure that real wages of low-paid workers did not go backwards.

What is the effect of the national minimum wage increase?

The national minimum wage applies to employees not covered by an award or registered agreement. The new national minimum wage as of 1 July 2024 is $915.90 per week, or $24.10 per hour. This is an increase of $33.10 per week.

How are minimum award rates being increased?

The Fair Work Commission also determined that minimum award wages will increase by 3.75%. These increases will take effect in relation to a particular employee from the start of the employee’s first full pay period on or after 1 July 2024.

Gender undervaluation award review

The Fair Work Commission identified several awards that required further specific consideration in order to address its gender equality obligations in setting minimum wages in awards. The Fair Work Commission has stated that it intends to conduct the review in a time-critical manner and before next year’s annual wage review, with a proposed timetable of 15 days of hearings in December 2024. The relevant awards are:

  • Children’s Services Award 2010
  • Social, Community, Home Care and Disability Services Industry Award 2010
  • Health Professionals and Support Services Award 2020
  • Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award 2020
  • Pharmacy Industry Award 2020

What should employers be doing to ensure compliance?

  1. Check that all employees are being paid at least the minimum wage.
  2. For employees that are award covered, ensure that employees are paid at least the increased minimum award rates from the first full pay period starting on, or after, 1 July 2024.
  3. Where employees are covered by an enterprise agreement, ensure that the base rates of pay provided under that agreement are at least equivalent to the new minimum rates of pay under the applicable award or the minimum wage order.
  4. Employers who use ‘all-inclusive’ salaries (such as via set-off clauses in their employment contracts or by using annualised salary arrangements) must ensure that the salary “buffer” is sufficient to cover off all of the employees’ minimum entitlements each pay period, taking into account the increased minimum wages.

Please note that there is not necessarily an obligation to pass on a wage increase to all employees. Where you pay an employee above the minimum wage rates, it may be possible for the increases to be absorbed without wages actually increasing. However, in conjunction with the further increase of the superannuation guarantee to 11.5% (from 11% currently), you should check this carefully to ensure your wage rates are still compliant.

Significant penalties exist under federal law and, in some cases, state laws for getting wage rates wrong. The Maddocks Employment, Safety & People team have extensive expertise in navigating wage compliance matters.

Have questions about wage compliance or the impact of the annual wage review on your workplace?

Contact our Employment & Workplace team

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By Meaghan Bare, Michael Nicolazzo, and Patrick Kelly

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