Employers urged to review pay changes before July 1

Employers are being urged to review their obligations ahead of a minimum wage rise that kicks in tomorrow, along with higher weekend penalty rates in some states.

Fair Work Australia recently conducted its annual wage review, granting an increase of 3.4% to modern award and minimum wages. Changes to pay will take effect in employees’ first full pay period on or after July 1.

The wage increase translates to an additional $19.40 a week for the nation’s lowest-paid workers. Pay increases will also come into force under the new system of modernised awards, with changes to be phased in over five years.

With the second anniversary of Labor’s Fair Work laws on Friday, Australian Industry Group chief executive Heather Ridout says the laws should be amended to improve competitiveness and productivity.

Under Labor’s complex award modernisation program, thousands of industrial awards – which differed between states and within industry sectors, and had different conditions and penalty rates – were merged into 122 awards.

The Fair Work Ombudsman website has been updated with information on the minimum wage increases, enabling employers to search for changes in award wages.

A spokesperson says employers were expected to be aware of their obligations, given minimum wage increases came in each year on July 1.

“But our approach is always fair and flexible, recognising that inadvertent breaches of workplace laws can and do occur,” he says.

The annual wage review sets minimum wages for everyone covered by the national workplace relations system, which applies to entities including:

• Corporations that carry out significant trading or financial activities. These corporations are often a Pty Ltd or Ltd company.
• Sole traders or partnerships in NSW, Queensland, South Australia and Tasmania.
• People employed in Victoria, the Northern Territory or the ACT.

It does not apply to sole traders and partnerships in WA.

The spokesperson says employers need to ensure they pay affected employees the appropriate modern award, and/or minimum pay rate, from July 1. The annual wage review decision increases:

• Modern award weekly wages by 3.4%.
• The national minimum wage for adults to $589.30 per week or $15.51 per hour.
• Allowances under applicable modern awards.
• Minimum rates for juniors, apprentices and trainees.

Employers can prepare for the change to minimum pay rates by completing the following:

Check what your staff are covered by. This could be a modern award, a collective agreement, national minimum wage rate or other type of industrial instrument. This will tell you what pay rates apply.

You can check what covers your staff by using the Ombudsman’s Award Finder tool, or speaking to a Fair Work adviser or industry association.

Keep up to date with changes in modern awards. Sign up for alerts to changes in modern awards by registering with Fair Work Australia subscriptions.

Ensure your payroll systems are ready. Your payroll systems and staff should be preparing for the change. Staff members need to be aware that it will apply from the first pay period on or after July 1. The new rates should be shown on employees’ payslips.