Breaking: 5.75% increase to national minimum wage and modern award rates
2 mins reading time
This morning (2 June 2023), the Fair Work Commission (FWC) announced that the National Minimum Wage and the Minimum Award wage will be increased by 5.75%.
The FWC further decided to no longer align the National Minimum Wage with the C14 Classification wage rate and to instead align it with the C13 wage rate in Modern Awards (the lowest classification rate applicable in most modern awards). This means that there is an increase of 8.65% for the lowest-paid workers under some modern awards.
Who will be affected by these changes?
This will directly affect the income of approximately 20.5% of Australian employees covered by Modern Awards who are currently being paid minimum Award rates. This will have a varying impact across Australia with the accommodation and food services, administrative and support services industries and small businesses being predominantly impacted.
What should your business consider moving forward?
If your business is currently paying any employees the National Minimum Wage or the minimum applicable Modern Award wage, you must ensure that their pay is increased by at least 5.75% to remain complaint, by the first pay period after 1 July 2023. It is also critical to consider any employees on annualised salaries or “rolled-up” rates to ensure that any “rolled-up rate” absorbs the minimum pay increase.
It is also timely, with significant additional reforms to the Fair Work Act, to review any current employment contracts.
Gender equality front of mind says FWC
The FWC in their decision emphasised a need for a greater focus on gender equality and job security, outlining that the most affected demographic are part-time and casual employees, who are statistically more likely to be female.
The FWC has put businesses on notice that their focus on gender equality and job security will remain front of mind in future reviews and Commission proceedings in line with the legislative amendments.
Contact us
If you have any questions regarding these increases or require assistance with implementing any of these legislative changes in your business, please contact our Employment, Safety and Migration team.
more
insights
stay up to date with our news & insights
Breaking: 5.75% increase to national minimum wage and modern award rates
This morning (2 June 2023), the Fair Work Commission (FWC) announced that the National Minimum Wage and the Minimum Award wage will be increased by 5.75%.
The FWC further decided to no longer align the National Minimum Wage with the C14 Classification wage rate and to instead align it with the C13 wage rate in Modern Awards (the lowest classification rate applicable in most modern awards). This means that there is an increase of 8.65% for the lowest-paid workers under some modern awards.
Who will be affected by these changes?
This will directly affect the income of approximately 20.5% of Australian employees covered by Modern Awards who are currently being paid minimum Award rates. This will have a varying impact across Australia with the accommodation and food services, administrative and support services industries and small businesses being predominantly impacted.
What should your business consider moving forward?
If your business is currently paying any employees the National Minimum Wage or the minimum applicable Modern Award wage, you must ensure that their pay is increased by at least 5.75% to remain complaint, by the first pay period after 1 July 2023. It is also critical to consider any employees on annualised salaries or “rolled-up” rates to ensure that any “rolled-up rate” absorbs the minimum pay increase.
It is also timely, with significant additional reforms to the Fair Work Act, to review any current employment contracts.
Gender equality front of mind says FWC
The FWC in their decision emphasised a need for a greater focus on gender equality and job security, outlining that the most affected demographic are part-time and casual employees, who are statistically more likely to be female.
The FWC has put businesses on notice that their focus on gender equality and job security will remain front of mind in future reviews and Commission proceedings in line with the legislative amendments.
Contact us
If you have any questions regarding these increases or require assistance with implementing any of these legislative changes in your business, please contact our Employment, Safety and Migration team.