The Fair Work Commission (FWC) today approved an increase in Federal Minimum Wage. In the first split wage panel decision in 23 years, a majority, led by FWC President Iain Ross, awarded a $13/week increase in minimum and award wages, but staggered the operative date over seven months, conscious of the impacts of COVID-19.
The 1.75 per cent increase lifts the new minimum hourly rate to $19.84 or $753.80 per week.
A range of industries, including healthcare, childcare and education will be among those that will receive an increase from 1 July 1. A second group, which includes construction and manufacturing employees, will get their rise from November, with the final group, in industries severely impacted by COVID-19, including fast food, hospitality, restaurants, aviation and live performance, will have to wait until February next year.
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 direct effects which schools which are merely paying salaries in accordance with the modern awards, under which salaries will increase from 1 July. Copies of the applicable modern awards are available on the FWC website –
The new Modern Award rates will 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.
The increase in the Federal Minimum Wage will also 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.