Around a quarter of the Australian workforce is set to receive a pay rise after the Fair Work Commission raised the national minimum wages by 3.75 percent. This will take the minimum hourly rate under the national minimum wage from $23.23 per hour to $24.10 per hour, amounting to a $33.10 increase to the weekly rate. The 3.75 percent increase will also apply to wages set by a modern award minimum wage, including modern award minimum wages for juniors, trainees, and disabled employees. Casual loading under modern awards will remain at 25%. Employers should be aware of whether their employees are covered by a modern award and adjust their wages accordingly.
The FWC cited cost-of-living pressures experienced by modern award reliant employees as the main reasoning behind the increase, which was lower than the 5.75% increase awarded last year. Concerns were raised regarding the living standards of workers reliant on minimum wages, which the Commission noted had generally been increasing, though some households continued to fall below the income relative poverty line. As well as seeking to improve the living conditions of low-paid employees, it was noted that an increase in the minimum wage would assist in reducing the gender pay gap, given that women are disproportionately represented amongst those that rely on either the national minimum wage or a modern award minimum wage.
The Commission also stated that no adverse effects on employment are expected, given that no such effects were observed to have resulted from the two previous annual wage reviews.
The increases are set to take effect from the start of the first full pay period that starts on or after the 1st of July 2024. In the meantime, employers should make the appropriate adjustments to their business operations so that they are ready to comply with the new minimum standards when they come into effect.
If you are not sure about what award covers your industry or what pay rates your employees should be receiving, please do not hesitate to contact us on (02) 9199 8597 or email us to discuss the applicable award and how the changes will affect your business.
The information contained in this post is current at the date of editing – 1 July 2024.
