What your business needs to know about the minimum wage increase

The Fair Work Commission has lifted the minimum wage by 2.4%, with Australia’s minimum wage workers now entitled to be paid $672.70 an week, or $17.70 an hour.

The rise is $15.80 a week more than last year’s weekly wage of $656.90, and well above the inflation rate of 1.3%.

Over a 52-week period, this leaves businesses paying $821.60 more a year per employee on the minimum wage.

The changes will take place at the start of the new financial year on July 1, which is the deadline for adjusting wages for those earning the minimum amount.

There are more than 1.8 million people on the minimum wage in Australia.

At the end of last financial year, the Fair Work Commission raised the minimum wage by 2.5%.

In making its decision, the Fair Work Commission said a “robust” economic climate allowed for an above-inflation increase.

Business groups concerned and disappointed

The Australian Chamber of Commerce and Industry had been advocating for an increase to the minimum wage of 1.2% increase, in line with inflation, and yesterday labelled the 2.4% increase “disappointing”.

The Chamber said said the increase is above the 1.9% average increase in private sector wages over the past 12 months.

“Consistently granting increases above the wage rises received by other workers is inconsistent with the role of minimum and award wages as a safety net,” said Australian Chamber chief executive James Pearson in a statement.

“The data shows that the most vulnerable people are those who are unable to find work, and low paid jobs are stepping stone into future employment opportunities,” he said.

The Australian Retailers Association’s Executive Director Russell Zimmerman said the ARA is also concerned by the decision.

“The announcement today to increase wages during this time of low consumer confidence and low growth will sadly result in further job losses and business closures – a very distressing truth for retailers,” he said.

Unions ask for more

Ged Kearney, secretary of the Australian Council of Trade Unions praised the rise but said after accounting for inflation, the increase would amount to “little more” than $6 a week for workers.

“If you take into account the inflation rate it delivers a real wage increase of just over 1%,” she said in a statement.

The ACTU had been pushing for an increase of $18.07 a week to $686.90.

“Malcolm Turnbull has on many occasions been talking up that it’s a great time be an Australian, and on many occasions he talks about the value of a high wage nation,” Kearney said.

Kearney says the government should have done more to push the minimum wage up, and said if they had lobbied the commission “we may have seen a different outcome”.