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 3.5%.
The new national minimum wage will be $719.20 per week or $18.93 per hour. This constitutes an increase of $24.30 per week to the weekly rate or 64 cents per hour to the hourly rate. The wage increase will come into operation on 1 July 2018.
This rate is higher than the increase which was ordered last year of 3.3%.
The new 3.5% increase is higher than the 1.9% CPI increase of the last year and so it keeps wages above the latest rate of inflation.
What Should You Do?
From 1 July 2018, employers must satisfy the new minimum payment obligations for all relevant staff.
Employers should now carefully review their wage arrangements and implement the necessary wage increases to ensure minimum wage rates are at least commensurate with the underpinning modern award. During this process, you should also keep in mind the changes to penalty rates, with the next phase of the lowered penalty rates transition taking effect from 1 July 2018.
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, minimum superannuation contributions or penalty rates, do not hesitate to contact HR Legal.