2 June, 2023
Annual wage review: minimum wages to Increase by 5.75%
Blog | EMA
The Fair Work Commission has today handed down its Annual Wage Review Decision under the Fair Work Act 2009 (Cth).[1]Award minimum rates of pay will be increased by 5.75%. The national minimum wage will be pegged to the C13 instead of the C14 manufacturing rate, and will also be increased by 5.75%.
Increases to Modern Awards
The Commission has adopted a percentage increase of 5.75% to adult award minimum rates of pay for each classification level.[2] For employee classifications subject to the recent Work Value Case increases,[3]employers will need to take into account both the 15% work value increase and the minimum wage increase.
The Commission will publish draft determinations for modern award pay increases in the coming weeks. Employers should monitor the Fair Work Commission’s website so it can review these determinations when they are published.
National Minimum Wage
The national minimum wage will be increased to $23.23 per hour, or $882.80 per week.[4] This rate has been calculated on the basis of a 38-hour week for a full-time employee and has been newly pegged to the C13 level (rather than the C14 level which was traditionally used). The national minimum wage order also contains specific provisions for award/agreement free employees:
- with a disability;
- who are junior employees; or
- apprentices and employees to whom training arrangements apply.
The casual loading has been maintained at 25% for award/agreement free employees and in the modern awards.
Effect of Decision
These changes affect the minimum rates only. If you are paying an over-award rate, you may be able to absorb the increase into any over award payments. We recommend that you seek advice before deciding to absorb the increase.
The increase may also affect employers covered by enterprise agreements or transitional agreements if they are expressly linked to an Award rate or Fair Work Commission increases, or where the minimum base rate of pay in the agreement falls below the equivalent minimum base rate in the Award – it is crucial for employers to check their enterprise agreement minimum rates of pay. Again, we recommend that you seek advice about your obligations if you are unsure.
Require further information/assistance?
This EMA Note is not comprehensive advice about your situation and does not cover all your obligations. If you require further information or advice, please contact your Consultant.
[1] Annual Wage Review 2022–2023 [2023] FWCFB 3500 (“Decision”). A summary decision can be viewed at here.
[2] Decision [209].
[3] [2023] FWCFB 40.
[4] Decision [207].
EMA Consulting is not a law firm and therefore does not provide legal advice or services. The information contained within this document and associated material is general in nature and should not be relied upon. If you require specific advice on a particular matter, we recommend that you contact EMA Consulting on 08 8203 1700. Subject to the matter at hand, your EMAC Consultant may recommend that you obtain formal legal advice. If formal legal advice is required, upon your written instruction EMAC will brief your matter to a legal practitioner for this purpose. The contents of this document and associated materials do not represent legal advice.
For more information or specific advice, please do not hesitate to contact one of our employee relations consultants.
