The Fair Work Commission has just published its Annual Wage Review decision, which provides that the National Minimum Wage will increase by 5.2% from $20.33 per hour to $21.38. This translates to $812.60 per week, up from $772.60 per week.
Modern award minimum rates will also increase by 4.6% for those who are paid more than $869.60 per week and $40 per week for those who are paid less than $869.60. This distinction is aimed at providing a proportionately higher increase to low-paid employees.
Similar to last year, the Commission has identified that exceptional circumstances exist for some industries, being the aviation, tourism and hospitality industries, that justify a delayed operative date for the increases.
More specifically, the increases will apply to the following awards from 1 October 2022:
For all other modern awards not listed above, the variations are to apply from 1 July 2022.
Employers should also note that from 1 July 2022, the Superannuation Guarantee percentage is also set to increase to 10.5% and the $450 per month threshold for super guarantee eligibility will be removed.
As part of the normal process, the Fair Work Commission invited submissions in relation to the Annual Wage Review from interested parties, including individuals, organisations and academics. This year, the newly elected Labor Government made a six-page long late submission that emphasised that the Commission should ensure that the real wages of Australia’s low-paid workers do not go backwards.
The Commission in announcing the decision, referred to the significant change in key economic indicators since the 2020-21, namely the sharp rise in the cost of living and the strengthening of the labour market. The inflation rate is at 5.1% and is expected to peak at 6% in the second half of this year. The Commission further noted that the increases awarded last year have resulted in a fall in the real value of National Minimum Wage and modern award minimum wages. Therefore, an increase in the National Minimum Wage and modern award minimum wages is necessary.
Gadens is able to assist you with any queries you have in relation to minimum wages, superannuation contributions and other employee entitlements.
If you found this insight article useful and you would like to subscribe to Gadens’ updates, click here.
Deivina Peethamparam, Partner
Steven Troeth, Partner
Carlyna Yap, Lawyer