Issue 8 2022 - Annual wage review: Minimum wages to increase by 5.2%


The Fair Work Commission has today handed down its Annual Wage Review Decision under the Fair Work Act 2009 (Cth).[1]The National Minimum Wage will be increased by 5.2%, with a minimum increase of 4.6% or $40 per week (whichever is greater) to modern awards.

 

Increases to Modern Awards

The Commission has adopted a percentage increase of 4.6%, subject to a minimum increase of $40 per week to adult award classifications.[2] The result of this is that the lowest-paid classifications (with wages below $869.60 per week) will receive a higher increase of $40 per week, and the higher paid classifications will receive a 4.6% increase.


The Commission advised that it will shortly publish draft determinations for modern award pay increases. Employers should monitor the Fair Work Commission’s website so it can review these determinations when they are published.


The increase will apply to all modern awards from 1 July 2022, other than the following awards:


· Aircraft Cabin Crew Award 2020

· Airline Operations—Ground Staff Award 2020

· Air Pilots Award 2020

· Airport Employees Award 2020

· Airservices Australia Enterprise Award 2016

· Alpine Resorts Award 2020

· Hospitality Industry (General) Award 2020

· Marine Tourism and Charter Vessels Award 2020

· Registered Licensed Clubs Award 2020

· Restaurant Industry Award 2020


The minimum wage increase to the above-listed modern awards will operate from 1 October 2022.


National Minimum Wage

The national minimum wage will be increased to $21.38 per hour, or $812.60 per week.[3] This rate has been calculated on the basis of a 38-hour week for a full-time employee. 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.


EMA Live

EMA Consulting will be hosting an EMA Live webinar on how the minimum wage decision affects businesses in a practical sense. Details of this session will be released shortly.


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 2021–2022 [2022] FWCFB 3500 (“Decision”). A summary decision can be viewed at here. [2] Decision [192].

[3] Decision [180].

 

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.

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