National Minimum Wage and Award Increases
The Fair Work Commission has handed down the 2022 Annual Wage Review decision, granting a 5.2% increase to the national minimum wage and a 4.6%, or a minimum of $40 per week, increase to modern award minimum wages.
In determining a proportional increase to modern awards, the Fair Work Commission determined that wages contained within modern awards that are above $869.60 per week will be increased by 4.6%, with rates below this figure to be adjusted by $40 per week.
This is the perfect time to consider what these increases will mean for you and your business. The increase this year is significant, so if you haven’t recently reviewed your employees’ rates and salaries to ensure they are still meeting the minimum requirements, now is the time.
As a business owner, you need to make sure you are still paying your employees correctly and above the award. It is not uncommon for our HR team to come across a business that has unintentionally allowed their wages to slip below the award. After several consecutive years of minimum wage increases, you may have been paying above the award in the past, but that may no longer be the case.
Australian employment laws and awards are complex and, unfortunately, it is easy to get caught out if you do not stay on top of the entitlements you should be paying your employees.
Timing of the Adjustments
The Fair Work Commission determined that the 4.6% increase would apply to most modern awards from 1 July 2022, with the exception of modern awards in the aviation, tourism and hospitality sectors. The variation to modern awards within these industries will not be operative until 1 October 2022.
What does this mean for employers?
Employers covered by modern awards or with employees receiving payments based on the National Minimum Wage will need to review their arrangements to ensure that employees are paid correctly.
For the vast majority of awards, the 4.6% wage increase comes into effect on 1 July 2022, in line with the 0.5% increase to the superannuation guarantee rate, taking superannuation to 10.5%.
Additional changes to superannuation is the removal of the $450/$350 minimum earnings per month to be eligible for superannuation. Employees who are under 18 years old, will still need to work 30 hours per week to be eligible for superannuation.
Employers covered by an enterprise agreement that refers to the Annual Wage Review will need to review the remuneration paid to their employees to ensure they remain compliant with the terms of that enterprise agreement.
Award Coverage
Do you know which award covers your employees? We often speak to employers that tell us they pay above the minimum wage so their employees are not subject to an award. However, this is not necessarily the case.
You need to understand which award is applicable to your industry and remember that you can be covered by several different awards in the same business.
Contact Us
If you would like further information regarding the Annual Wage Review, Award Coverage or a full audit on all rate and salaries to ensure compliance, please get in touch with the HR Team at Halkin Business Partners.
