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Minimum Wage Increases & How it Will Affect You

The Fair Work Commission (FWC) has announced that the minimum wage will be increasing by 1.75% and will apply to all Modern Awards. The National Minimum Wage (NMW) will be $753.80 or $19.84 per hour (an hourly increase of 35 cents). In light of the COVID-19 pandemic, the increase in the NMW and modern award minimum wages seem modest in comparison to the 3% increase last July 2019. This article will explain these changes to the minimum wages and what employers need to do to.

Increases to Awards

Minimum wage increases to awards will commence on 3 different dates for different groups of awards based on the extent the COVID-19 pandemic has adversely impacted each respective industry. The breakdown of these changes has been listed below.

  • Group 1 Awards – from 1 July 2020

  • Frontline Health Care & Social Assistance Workers

  • Teachers & Child Care

  • Other Essential Services

  • Group 2 Awards – from 1 November 2020

  • Construction

  • Manufacturing

  • A range of other industries

  • Group 3 Awards – from 1 February 2021

  • Accommodation & Food Services

  • Arts & Recreation Services

  • Aviation

  • Retail

  • Tourism

What Should You Do as an Employer?

As an employer, it is important to review your current employment contracts assessing your employee’s positions, roles, and most importantly their pay rates. Employers need to assess the modern awards and enterprise agreements their employees fall under and accordingly see what Group of changes they fall into.

Employers paying their employees well above the current NMW or their relevant modern award or enterprise agreement may not have to make any changes. However, if you are paying your employees only slightly above the current NMW it is important to ensure your pay rates will comply with the new NMW of $19.83 per hour. Planning in advance is key and it is useful to ensure your payroll systems are prepared to implement the new changes.

As an employer, you need to be aware that the failure to meet these new obligations to minimum wages would carry monetary penalties. In reference to the Fair Work Ombudsman (FWO) Compliance and Enforcement Policy, maximum penalties for such contraventions of an individual can be up