There has been more interest this year than normal in the Fair Work Commission’s annual wage review given the inflationary spike and change of government. The Fair Work Commission handed down its Annual Wage Review decision today. The FWC Panel unanimously decided to:
• increase the National Minimum Wage by $40.00 (5.2%) per week;
• increase all modern award rates by 4.6% with a minimum increase of $40.00 per week for weekly minimum wage rates below $869.60 per week.
The Fair Work Commission:
• decided to provide a proportionately higher increase to low-paid employees whilst seeking to constrain inflationary pressures:
• noted the most significant changes since last year’s review have been the sharp rise in the cost of living and the strengthening of the labour market;
• considered the increases would not have a significant adverse effect on the performance and competitiveness of the national economy;
• acknowledged that there might be a real wage cut for some award reliant employees which could be addressed in later reviews.
The National Minimum Wage and most award rate increases will apply from 1 July 2022. However, award increases for those employed in the aviation, tourism and hospitality sectors will be delayed until 1 October 2022 due to last year’s award increase taking place later in the year.
This means that the federal weekly minimum full time wage will increase from 1 July 2022 by $40.00 per week to $812.60 per week ($21.38 per hour) from $772.60 ($20.33 per hour) and there will also be award increases for most awards from this date and allowances will also be affected. It is important to check your particular award for commencement of the increase.
A summary of the Commission’s decision can be found at FWC Annual Wage Review 2021-2022 Summary of Decision. Employers should check the Fair Work Commission website (www.fwc.gov.au) for pay rate revisions to their particular modern award/s and implementation dates. You can also subscribe to electronic award updates from the Commission. The Fair Work Ombudsman also has online pay checking resources (www.fairwork.gov.au/pay).
Remember that employees cannot be paid less than required by an applicable modern award (including overtime, penalty rates and allowances). It is only trainees, apprentices and junior employees, employees to whom training arrangements apply and employees with a disability who may be paid less than these minimum rates and then only if specified in an applicable award or enterprise agreement. For non award employees, the obligation is for employers to ensure that an employee is being paid more than the minimum wage rate for all their hours of work. Care also needs to be taken in relation to annualised wage and common law salary arrangements.
Also, from 1 July 2022, the compulsory employer Superannuation Guarantee rate will increase from 10.0% to 10.5%. There will also be increases in the unfair dismissal high income threshold (the annual remuneration level above which award free employees cannot bring unfair dismissal claims) and the maximum compensation for unfair dismissals. Please contact us if you would like any further information or help.