The Fair Work Commission today approved an increase in Federal Minimum Wage which will apply from the first pay period starting on or after 1 July 2019. The 3% increase granted will mean that the National Minimum Wage will increase to $740.80 per week, or $19.49 per hour.
The new national minimum wage applies to employees who aren’t covered by an award or an agreement and Christian schools employees are largely covered by such instruments. There will, however, be some flow on effects which schools should be aware of.
Firstly, the increase in the Federal Minimum Wage will impact the amount paid under the Government’s Paid Parental Leave Scheme. This will consequently reduce any top-up that may be payable under industrial agreements where a form of maternity allowance calculated as a top up is payable.
Secondly, the increase will flow on into increases in the applicable modern awards, the Educational Services (Teachers) Award 2010 and Educational Services (Schools) General Staff Award 2010. Any schools paying staff under these instruments should expect to pay a 3% increase from the first pay period starting on or after 1 July 2019.
The new Modern Award rates will also form the baseline for “better off overall test” applying to new Enterprise Agreements (EA). If you have an EA in place, you will need to ensure the minimum base rates in the EA remain at a minimum equal to the new Modern Award rates. If not, EA rates will need to be increased to match the Modern Award.
Today’s decision will impact some allowances as well as base rates. A number of Modern Award allowances are expressed as a percentage of the “standard rate”, which is linked to the wage rate of a specific classification in the award. These allowances will therefore increase in line with the increase in the standard rate.