National Minimum Wage and Award Rates to Increase by 1.75%
The 2020 Annual Wage Review has resulted in a decision by the Fair Work Commission (FWC) to increase the national minimum wage and the minimum award rate by 1.75%.
The new national minimum wage, which applies to all full-time and part-time employees who are not covered by an award or agreement, will increase to $753.80 per week or $19.84 per hour (before tax) from 1 July 2020.
The Fair Work Commission has also increased minimum pay rates in the modern awards by 1.75%.
This is a significantly lower increase from the FWC, in comparison to recent years. Although employer groups argued for a wage freeze, the FWC took into account the effects that COVID-19 has had on the Australian economy, and therefore decided on a phased implementation of the increase across different groups of awards.
When does the change come into effect?
|Award Group||Operative Date|
|Group 1 Awards||1 July 2020|
|Group 2 Awards||1 November 2020|
|Group 3 Awards||1 February 2021|
The Awards in each group are listed here.
Which employees will receive this increase?
Employees whose minimum wage entitlements are set by:
- The national minimum wage
- A modern award
- A registered agreement (in some circumstances)
It is important to note that if you have employees on a salary which will already be above the national minimum wage, you are not obliged to increase their salary, however you could consider the 1.75% increase at their next salary review meeting.
What do employers need to do?
- Check whether your employees are covered by the national minimum wage, or a modern award.
- Should a modern award apply to your employees, ensure you have correctly classified employees under the relevant award, and confirm the minimum rates of pay that will apply.
- Review the current rates of pay for your employees and, if required, adjust their pay rates from their first full pay period starting on or after the appropriate date as it applies to your modern award.