Annual Wage Review Decision 2021-22

Annual Wage Review Decision 2021-22

The Fair Work Commission’s (FWC’s) Expert Panel has announced the outcome of its annual review of the national minimum wage (NMW) and minimum wages under modern awards.

National Minimum Wage Increase

The changes to the NMW are as follows:

1. The NMW will increase by 5.2%, currently from $772.60 per week ($20.33 per hour) to $812.60 per week ($21.38 per hour). The increase to the NMW is effectively an extra $40 per week.

2. Two special national minimum wages will apply for award/agreement free employees with disability:

a. For employees with disability whose productivity is not affected, a minimum wage of $812.60 per week or $21.38 per hour based on a 38-hour week; and

b. For employees whose productivity is affected, an assessment under the supported wage system, subject to a minimum payment fixed under the Supported Wage System (SWS) Schedule;

3. Wages provisions for award/agreement free junior employees based on the percentages for juniors in the Miscellaneous Award 2020 applied to the NMW;

4. The apprentice wage provisions and the National Training Wage Schedule in the Miscellaneous Award 2020 for award/agreement free employees to whom training arrangements apply, incorporated by reference, and a provision providing transitional arrangements for first year award/agreement free adult apprentices engaged before 1 July 2014; and

5. A casual loading of 25 per cent for award/agreement free employees

The NMW increase will take effect from 1 July 2022.

Modern Awards Minimum Wage Increase

Modern Award minimum wages will increase by 4.6% or by $40 per week, depending on the employee’s classification.

The Expert Panel has indicated that this will mean Modern Award minimum wages will increase as follows:

1. 4.6% for minimum wage rates above $869.90 per week;

2. $40 per week for minimum wage rates below $869.90 per week.

The increase to most Modern Awards will commence from 1 July 2022, however, a number of Modern Awards in the aviation, tourism and hospitality sectors will have a delayed commencement from 1 October 2022.

Superannuation changes from 1 July 2022

On 1 July 2022, the superannuation guarantee rate will increase from 10% to 10.5%.

It is important to make sure that as of 1 July 2022, employers are making the correct superannuation guarantee contributions to their eligible employee’s superannuation fund. If you are a business, you will need to ensure that you use the new rate of 10.5% to calculate superannuation on all payments made to employees on or after 1 July 2022.

Also, from 1 July 2022, employers will be required to make superannuation contributions to their employees (who are over 18), regardless of how much the employee earns. This change is due to the removal of the $450 per month threshold for superannuation guarantee contributions.

Employees who are under 18 years are still required to work more than 30 hours in a week and earn $450 or more (before tax) per calendar month to be eligible for superannuation guarantee contributions.

Now would be an opportune time for your business to review its employment agreements and arrangements and to obtain appropriate employment advice to ensure it is compliant with the upcoming changes.

If you require further assistance, please contact our employment law team.

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