Today, Fair Work Australia's Minimum Wage Panel (Panel) has handed down its first annual wage review decision pursuant to the Fair Work Act 2009 (Cth).
The increases set out in the Panel's decision are:
- an increase of $26 per week ($0.69 per hour) to all modern award minimum weekly wages;
- an increase of $26 per week ($0.69 per hour) to the National Minimum Wage (NMW). This brings the weekly rate for the NMW to $569.90 per week ($15 per hour); and
- an increase in the casual loading for all award/agreement free employees to 21%.
The $26 per week increase will also apply to the following transitional instruments that have been preserved under the transitional legislation:
- Australian Pay and Classification Scales;
- State reference transitional awards; and
- Division 2B enterprise awards.
However, the increase will not apply to:
- Division 2B State awards (except Division 2B enterprise awards);
- Common Rule Awards confined to Victoria; and
- Supported Wage System employees (ie employees who qualify for a disability support pension whose work productivity is affected), for whom a separate determination will be made.
The increase will no doubt be welcomed by employees, given that the final decision handed down by the Australian Fair Pay Commission (before its abolition) last year froze minimum wage increases.
The Panel's decision follows submissions made by various parties to the Panel, including the Australian Government, employer associations and Unions, with suggested increases ranging from $12 per week to $27
per week.
The Australian Government had encouraged the Panel to grant a "considered real increase in minimum wages", arguing that the Australian economy had remained resilient despite the global financial conditions.
The Panel agreed, stating that since March 2008, increases in productivity, prices and real earnings had occurred, but increases in minimum wages had not.
The wage increases under the Panel's decision will apply from the first pay period on or after 1 July 2010.
Employers who pay employees at minimum wage rates (whether pursuant to a modern award, the national minimum wage or other instrument) will be required to increase employees' pay on 1 July 2010. However, employers who pay their employees above the minimum rates in applicable modern awards or instruments may be able to absorb these increases without being required to make changes on 1 July 2010.
Should you require advice on the impact of the Panel's decision on your workforce, please contact a member of the Hall & Wilcox
Employment team.