The Fair Work Commission has announced that the national minimum wage, along with modern award minimum wages will be increased by 1.75%. The new national minimum wage will be $753.80 per week or $19.84 per hour. This amounts to an increase of $13.00 to the weekly rate.
In making this decision, the Fair Work Commission acknowledged that the job market had experienced an unprecedented shock caused by the coronavirus pandemic. This led them to adopt a cautious approach to both the quantum and timing of an adjustment to the national minimum wage and modern award minimum wages.
The national minimum wage will increase effective from the first pay period starting on or after 1 July 2020. However, Modern Award increases will be staggered and will happen in three different groups:
Group 1 Awards – Increase from 1 July 2020
- Frontline Health Care & Social Assistance Workers
- Teachers and Child Care
- Other essential workers
Group 2 Awards – Increase from 1 November 2020
- Other industries
Group 3 Awards – Increase from 1 February 2021
- Accommodation and Food Services
- Arts and Recreation Services
A list of Awards categorised into the three groups is available on the Fair Work Ombudsman website.
Who does the increase apply to?
- Employees who aren’t covered by an Agreement
- The increase doesn’t automatically apply to rates within registered agreements unless stated within the agreement. However, the base rate within a registered agreement cannot be less than the modern award rate.
What happens next?
In the coming weeks or as the increases apply, the Fair Work Commission will update pay rates in each award. Employers who pay their employees the National Minimum Wage or as per a Modern Award rate will need to pay as per the new minimum wage rate from the first full pay period starting on or after the date specified for the increase.
If you have a registered agreement that covers your employees, you will need to need to ensure that the minimum base rates within your agreement reflect the new minimum base rates applicable within the Modern Award rates. If your current Agreement includes base rates which are less than the new National Minimum Wage rate, you will need to increase them.
In addition to an increase in base rates, award allowances that are calculated on a percentage of base rates will also increase in line with the new rate.
If you require more information in relation to calculating the correct base rates for your employees or need help reviewing a registered agreement to see if these changes apply to your business, please call Preston HR on 4052 0709. We are based in Cairns but service all over Queensland.