Wednesday, 17 June 2020

Will there be a minimum wage increase in 2020?

Each year, the Fair Work Commission’s (FWC) Expert Panel conducts an annual wage review (Review) which seeks to ensure minimum wages are kept above the latest rate of inflation, among other considerations.

Last year, the Expert Panel ordered an increase to the national minimum wage and modern award minimum wages of 3.0%. (See HR Legal’s article: ‘Minimum Wage Increase 2019)

Historically, any increases to the national minimum wage have taken effect from the first full pay period on or after 1 July.

However, the COVID-19 pandemic has affected how the FWC is dealing with the annual wage review this year and the review process has been delayed.

On 23 March 2020 and 6 April 2020, the FWC extended the timetable for receiving submissions from interested parties to provide an opportunity to comment on the rapidly changing environment and relevant data that has been emerging.

Submissions have been presented by a number of parties. In the submissions, the Australian Government urged the Expert Panel to adopt a “cautious approach” to the annual wage review. This is echoed by employer groups who are advocating for a 0% wage increase, or otherwise staggered increases for certain employers and employees due to COVID-19.

Employer groups have also encouraged the activation of the ‘exceptional circumstances’ clause in the Fair Work Act 2009 to delay the operative date for any increase until 15 July 2020.

Conversely, the Australian Council of Trade Unions argued that the Expert Panel should deliver a 4% increase, particularly given the Government’s provision of wage subsidies.

Final submissions were lodged this month and the Expert Panel conducted public consultations last week.

The Expert Panel is required to conclude the review by 30 June 2020.

What Should You Do?

Employers must continue to pay employees in accordance with their applicable modern award, enterprise agreement or employment contract and stay up to date with the review process.

HR Legal will continue to provide updates of the status of the review.

If you have any questions regarding your minimum pay obligations, minimum superannuation contributions or penalty rates, 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.