Tuesday, 31 May 2016

Annual Wage Increase

As part of its annual wage review, the Fair Work Commission’s Expert Panel has today ordered an increase to the national minimum wage of 2.4%.

The new national minimum wage will be $672.70 per week or $17.70 per hour. This constitutes an increase of $15.80 per week to the weekly rate or 41 cents per hour to the hourly rate.

The Panel also considered it appropriate to increase modern award minimum wage rates by 2.4%. Weekly wages will be rounded to the nearest 10 cents.

The wage increase will come into operation on 1 July 2016.

What should you do?

From 1 July 2016, employers must satisfy the new minimum payment obligations for all relevant staff.

Employers should now carefully review their wage arrangements, so as to:

  • Identify the modern awards or other instruments applying in the workforce, and which work classifications apply
  • Compare existing pay rates, and implement the necessary wage increases, with effect from 1 July 2016, to ensure minimum wage rates are at least commensurate with the underpinning modern award

Employers paying above-award payments should also review such arrangements to ensure that they are high enough to accommodate the increases (provided they are also supported by the necessary individual flexibility or other agreements).

Further, as a minimum, employers must continue to provide the minimum 9.50% superannuation contributions to the employees’ complying funds, calculated against Ordinary Time Earnings, to avoid liability to pay the Superannuation Guarantee (SG) Charge.

If you have any questions regarding your minimum pay obligations, or minimum superannuation contributions, do not hesitate to contact HR Legal.


This article was produced by HR Legal. It is intended to provide general information only in summary format on legal issues. It does not constitute legal advice, and should not be relied on as such.

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