A new financial year in employment law
By Alison Baker
Key changes to various wage rates, super contributions and thresholds impacting Australian employers and employees took effect on 1 July 2024. We outline everything you need to know about this financial year.
Increase to the minimum wage
The Fair Work Commission (FWC) has increased the national minimum wage by 3.75%. This change sees the national base rate for adult employees not covered by an award or registered agreement rise from $882.80 to $915.90 a week (or from $23.23 to $24.10 an hour).
In conjunction with this increase, minimum award wages have also risen by 3.75%.
This increase was made following the FWC annual review on the national minimum wage and minimum award rates conducted by the FWC’s Expert Panel. The panel considered overall cost of living pressures, factoring in both the Stage 3 tax cuts and Federal Budget cost-of-living measures.
Employers and their employees should be aware that these changes take effect from the first full pay period after 1 July 2024.
Looking ahead, the FWC will review gender undervaluation in certain modern awards and consider proposing changes to classifications and minimum wage rates. These awards are:
- Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award 2020;
- Children’s Services Award 2010;
- Health Professionals and Support Services Award 2020;
- Pharmacy Industry Award 2020; and
- Social, Community, Home Care and Disability Services Industry Award 2010.
Superannuation contribution guarantee
The superannuation contribution guarantee also increased on 1 July, rising from 11% to 11.5%.
This increases the superannuation contributions made by Australian employers into superannuation funds on behalf of employees and is based on a percentage of an employee’s earnings.
The superannuation contribution guarantee has risen by 0.5% for the past few years and this trend is set to continue next financial year where it will reach 12%.
High-income threshold and the compensation cap
On 1 July each year, both the high-income threshold and the compensation cap for unfair dismissal claims increase as prescribed by the Fair Work Regulations 2009 (Cth) (FW Regulations).
For this financial year, the high-income threshold for unfair dismissal claims has increased from $167,500 to $175,000. Any employee who has an annual rate of earnings greater than the threshold will be precluded from making an unfair dismissal claim, unless they are covered by a modern award, or an enterprise agreement applies to them.
For a dismissal that took effect on or before 30 June 2024, the previous financial year’s threshold will apply.
Under section 392(5)(b) of the Fair Work Act 2009 (Cth) (FW Act), the compensation cap in an unfair dismissal claim will be half the value of the high-income threshold. Accordingly, the maximum compensation that can be awarded by the FWC to an employee who has been unfairly dismissed rises from $83,750 to $87,500.
For any questions about how the changes apply to your organisation, contact a member of our Employment & Workplace Relations team.
This article was written with the assistance of Lucy McDonald, Law Graduate.