How the FWC Minimum Wage Increase Affects Your Business
The Fair Work Commission (FWC) recently announced a major update for employers across Australia. Specifically, the FWC voted to increase the National Minimum Wage and all Modern Award rates by 1.75%. This FWC minimum wage increase results in a new full-time wage of $753.80 per week, or an hourly rate of $19.84.
Why the Commission Chose a Staggered Approach
The FWC Minimum Wage Panel carefully considered petitions from various groups before reaching this decision. For instance, employer groups recommended a wage freeze to protect businesses during the economic downturn. Conversely, the ACTU requested a 4% increase to help low-paid workers and stimulate the economy.
Because the economy remains in a fragile state, the FWC Panel decided on a cautious approach. Therefore, they are rolling out the FWC minimum wage increase in three distinct stages.
Timeline for Modern Award Pay Rises
You must identify which group your industry falls into to remain compliant. Consequently, the increases take effect on the following dates:
- Group 1: July 1st, 2020 This group includes frontline healthcare, social assistance, teachers, and childcare workers.
- Group 2: November 1st, 2020 This category covers manufacturing, construction, and several other essential industries.
- Group 3: February 1st, 2021 Finally, this stage includes retail, tourism, aviation, and food services.
Compliance for Annualised Salaries and IFAs
If you use Individual Flexibility Agreements (IFAs) or annual salary contracts, you must act now. You need to ensure your employees remain “better off overall” despite the FWC minimum wage increase.
Assurance HR can help you audit these agreements. Click here to learn more about our compliance services. For official updates, you can also visit the Fair Work Commission website
Let Assurance HR Support Your Business
We understand that navigating these changes is difficult in the current environment. However, our team is ready to help you unpack the ruling and calculate your new pay rates.
If you need a professional payroll audit, contact Assurance HR today! Call us on 1800 577 515.
