On 1 June 2018, the Fair Work Commission announced increases to minimum wages.
National minimum wage increase
The new national minimum wage will be $719.20 per week, or $18.93 per hour. This represents an increase of 3.5 percent.
This increase takes effect from the first pay on, or after, 1 July 2018. Even award-free employees must receive at least the national minimum wage.
Award minimums increased
Minimum wages in awards will also increase by 3.5 percent.
The casual loading for employees covered by the Business Equipment Award 2010 will be increased to 23 percent.
Employers will need to check that award covered employees are paid at least the minimum award rates from the first pay period starting on, or after, 1 July 2018.
What about employers with enterprise agreements, or with employees being paid ‘all-in’ salaries?
Even where the employer is a party to an enterprise agreement, it must ensure that the base rates of pay provided under that agreement are at least equivalent to the new minimum rates of pay.
Employers who have set-off clauses in their employment contracts where they pay employees ‘all-inclusive’ salaries will also need to make sure that they are paying enough to cover their employees’ minimum entitlements each pay period. This includes any entitlements that the employee may have under any applicable award, taking into account the working patterns of employees.
Employers who utilise annualised salary arrangements permitted by some awards should compare the annualised salary against the updated award to ensure that employees are receiving sufficient remuneration.
For more information on the minimum wage increases, please contact a member of our Employment and Workplace Relations team on (03) 8600 8888.
Note: This update is a guide only and is not intended to constitute legal advice.