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 to $126,000 or $630,000 for companies.
What if Employees are not covered by Modern Award or Enterprise Agreement?
If you pay an employer who pays your employees in accordance with NMW as they are not subjected to any modern awards and enterprise agreements, you must meet the NMW changes from the first full pay period on or after 1 July 2020. Therefore, from 1 July 2020, these employers must be paying full-time, part-time, and casual employees at least $19.84 per hour.
What About the Job Keeper Scheme?
Considering the JobKeeper scheme is in effect until the end of September 2020, it is crucial to understand how it will interact with minimum wage obligations. These changes will apply to employees and employers operating under the JobKeeper scheme, regardless if they get their pay rate from a modern award or the NMW. Therefore, if you fall under the JobKeeper scheme and have employees under the NMW or a Group 1 modern award, you must still adhere to these changes irrespective of the JobKeeper scheme.
How We Can Help?
Given the turbulent environment during the COVID-19 pandemic, it is important to assess how these increased wages might impact your future as an employee. There may be difficult times ahead and as an Employer, you may have questions on complying with minimum wage obligations or other Employment Law questions. Please feel free to contact our team at Voice Lawyers, we are more than happy to help with any questions you may have!
If you have any questions or issues regarding this article or another employment law related matter, please contact Voice Lawyers on:
(02) 9261 1954 or voice@voicelawyers.com
Alternatively, you can book an appointment with a lawyer here: http://portal.voicelawyers.com/
If you are interested in reading about the Fair Work Commission's response to COVID-19, check out our article here.