Minimum wage increase

The Fair Work Commission’s Minimum Wage Panel (MWP) has published its seventh annual wage review under the Fair Work Act 2009 (Cth).

The outcome of MWP’s review is that from 1 July 2016:

• modern award minimum wages will increase by 2.4%; and
• the National Minimum Wage will increase to $672.70 per week (up from $656.90 per week) or $17.70 per hour (up from $17.29 per hour).

The MWP confirmed that up to 1.86 million employees will be affected by the increase.

What does this mean for employers?

In coming to its decision, the MWP cited a number of factors as favouring an increase in wages including the available economic data and forecast indicators, the labour market, relative living standards, the needs of the low paid, collective bargaining and equal remuneration.

The MWP considered submissions put forward by a wide range of parties, including the Australian Government, several state governments, bodies representing the interests of employees and employers and other private organisations and individuals.

The decision of the MWP means that employers who pay their employees at minimum wage rates pursuant to a modern award, the National Minimum Wage or other industrial instrument, will be required to increase their employees’ pay in the first pay period on or after 1 July 2016.

Employers who pay their employees above the minimum rates of applicable modern awards or other industrial instruments may be able to absorb the increases without making any changes.

The Hall & Wilcox Employment and workplace relations team can assist employers with meeting their minimum wage compliance obligations.