Following the Annual Wage Review 2021, the Fair Work Commission has announced a 2.5% increase to minimum wages.
The new national minimum wage (NMW) will be $20.33 per hour or $772.60 per week and will apply from the first full pay period on or after 1 July 2021. The hourly rate is calculated on the basis of the 38-hour week for a full-time employee which is equivalent to an increase of $18.80 per week to the weekly rate or 49 cents per hour to the hourly rate.
The Annual Wage Review takes into account the Super Guarantee increase which takes effect from 1 July 2021 [read more here] and the removal of the $450 per month eligibility threshold for mandatory superannuation contributions.[1]
The modern award minimum wages have also been increased by 2.5%, however, industries hard-hit by the COVID-19 pandemic have been afforded some relief under the Annual Wage Review with the increase in particular Award rates operating from a date later than 1 July 2021.
The increase to minimum award rates will occur in 3 stages:
- Wages in the following awards will increase from 1 November 2021:
- Air Pilots Award 2020
- Aircraft Cabin Crew Award 2020
- Airline Operations – Ground Staff Award 2020
- Airport Employees Award 2020
- Airservices Australia Enterprise Award 2016
- Alpine Resorts Award 2020
- Amusement, Events and Recreation Award 2020
- Dry Cleaning and Laundry Industry Award 2020
- Fitness Industry Award 2020
- Hair and Beauty Industry Award 2010
- Hospitality Industry (General) Award 2020
- Live Performance Award 2020
- Mannequins and Models Award 2020
- Marine Tourism and Charter Vessels Award 2020
- Nursery Award 2020
- Racing Clubs Events Award 2020
- Racing Industry Ground Maintenance Award 2020
- Registered and Licensed Clubs Award 2020
- Restaurant Industry Award 2020
- Sporting Organisations Award 2020
- Travelling Shows Award 2020
- Wine Industry Award 2020.
- Wages in the General Retail Industry Award will increase from 1 September 2021.
- Wages in all other Awards will increase from 1 July 2021.
In addition the NMW order will contain:
- Two special NMW for award/agreement free employees with disability:
- For employees with disability whose productivity is not affected, the minimum wage will be $20.33 per hour or $772.60 per week;
- 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;
- Wages for award/agreement free junior employees will be based on the percentages for juniors in the Miscellaneous Award 2020 applied to the national minimum wage.
- The apprentice wage provisions and the National Training Wage in the Miscellaneous Award 2010 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
- A casual loading of 25 per cent for award/agreement free employees.
Key takeaways
- Employers who currently pay above National Minimum Wage or Award rates of pay are not obliged by this decision to increase their rates of pay. However employers need to ensure their rates remain at least as beneficial, once the increase is applied.
- If you pay any of your employees under annualised salary arrangements you will need to conduct an audit of those annualised salaries against the new Award rates and working patterns to ensure the annual salary compensates for award entitlements.
Employers who pay under enterprise agreements should ensure that the base rates in those agreements remain at least equal to the new minimum Modern Award rates.
Contact our employment team to check how the Annual Wage Review will affect you.
[1] Annual Wages Review 2020-21 decision at [59]-[60].
