Increases to Minimum Wages – What Employers Need to Know
- Date of Change:
- 19 June 2020
- Takes Effect:
- Phased rollout from 1 July 2020 to 1 February 2021
The Fair Work Commission has announced a 1.75% increase to minimum wages.
The increase will be applied to all Awards.
The changes impact employers who pay staff the minimum wage under an Award.
Who does the increase apply to?
- The 1.75% increase applies to the national minimum wage and will apply to minimum rates in all Awards
- The increase doesn’t affect employees who already get paid more than their new minimum wage
- If you employ staff under a registered agreement, you will need to check to see whether the increase impacts these employees
- For employees who are not covered by an Award or agreement, the new national minimum wage is $753.80 per week or $19.84 per hour. This applies from the first full pay period starting on or after 1 July 2020.
Impact on the JobKeeper payment
The new minimum wage also applies to any work an employee performs while they’re in the JobKeeper scheme, if they get their pay rate from an Award or the national minimum wage.
Under the JobKeeper scheme, each fortnight employers need to pay their employees the higher of:
- the amount of the JobKeeper payment ($1500 before tax), or
- their usual pay for the work they perform during the fortnight (including any paid leave or public holiday pay).
When calculating the amount an employee in the JobKeeper scheme needs to be paid, the employee’s usual pay for work performed in the fortnight could be affected by the minimum wage increase.
Make sure you check your relevant Award for details. You can find your Award on the Fair Work Ombudsman website.
When will the increase come into effect?
Increases to awards will start on 3 different dates for different groups of awards.
Group 1 Awards – from 1 July 2020
- Aged Care Award
- Health Professionals and Support Services Award
- Nurses Award
- Social, Community, Home Care and Disability Services Industry Award
Teachers, childcare and frontline health care workers as well as other essential services are also covered in this group.
Group 2 Awards – from 1 November 2020
- A range of other industries
Group 3 Awards – from 1 February 2021
- Accommodation and Food Services
- Arts and Recreation Services
For a full list of the awards impacted in each phase refer to the Fair Work Ombudsman website.
What happens next?
More information from the Fair Work Commission
The Fair Work Commission will issue draft determinations and orders about how the increase affects Awards and then update the pay rates in each Award.
Information, resources and updates to the Fair Work pay tools will be also be released.
amerginhub Best Practice Tip
- Check whether your employees are impacted by the change, including those on the JobKeeper scheme
- Make sure you inform your HR team of the changes and update relevant employment contracts with changes to wages
- Make sure you inform your payroll team of the changes to wages
- Notify impacted employees of the changes to wages
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