News & Insights

national minimum wage changes

The annual Minimum Wage increase is around the corner. Following the Fair Work Commission’s annual wage review decision on 19 June 2020, it has now been confirmed that Australia’s National Minimum Wage will rise by 1.75% from 1 July 2020.

Currently, the lowest amount of remuneration an individual can receive per hour is $19.49, or $740.80 per 38-hour week (before tax). However, as of 1 July 2020, the National Minimum Wage will increase to $19.84 per hour, or $753.80 per 38-hour week.

when are the changes to awards?

Unlike in previous years, the changes to the minimum wage rates set out in the various modern awards will come into effect on three different dates, depending on the industry concerned. The key industries and occupations for each of these phases are outlined below:

1 July 2020: Group 1 Awards (in addition to the Minimum Wage)

• Frontline healthcare and social assistance workers
• Teachers and childcare workers
• Other essential services

1 November 2020: Group 2 Awards

• Construction
• Manufacturing
• Clerks
• A range of other industries

1 February 2021: Group 3 Awards

• Accommodation and food services
• Arts and recreation services
• Aviation Retail Trade
• Tourism

what does this mean for your business?

The increases will impact all Australian businesses, across all industries, but timing for the increase will vary depending on the industry in which you operate, as outlined above.

Further, an entitlement to the JobKeeper subsidy does not relieve employers from the application of the increases. Accordingly, an employee’s JobKeeper rate of pay will increase as a result, unless they are not entitled to any more than the $1,500 per fortnight for the hours they work (based on the new minimum entitlements) during each fortnight.

Employers will also need to ensure that the new rates are taken into account when setting salaries and informing employees about their annualised salaries under applicable award provisions.

we are here to help

If you require assistance understanding how and when these changes will impact your business, or how to implement them, please contact our Employment, Safety and Migration team.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.