The Fair Work Commission is responsible for reviewing and setting minimum wages for employees in the national workplace relations system.
The Expert Panel of the Fair Work Commission has handed down its Annual Wage Review 2020-21 Decision.
This year the minimum rates of pay in modern awards and the National Minimum Wage will increase by 2.5 per cent, with the increase operative on different dates for different awards.
Why are there different operative dates for the increases this year?
In determining their decision, the Fair Work Commission (FWC) noted that not all industries and sectors have been and continue to be affected by the COVID-19 pandemic.
They separated awards into 3 groups and decided that the wage increases for each group would apply on different dates, depending on the level of impact the pandemic has had on that particular industry/sector.
Group 1: Most modern awards and workers who are paid the National Minimum Wage (NMW) will have the increase operative from the first full pay period that starts on or after 1 July 2021.
Group 2: The minimum wage increase for employees covered by the General Retail Industry Award 2020 will be operative from the first full pay period that starts on or after 1 September 2021.
Group 3: For awards covering the industry sectors which have been most adversely affected by the pandemic (i.e. personal services, accommodation and food services, arts and recreation services, aviation, retail trade and tourism), the minimum wage increase is operative from the first full pay period that starts on or after 1 November 2021. For a list of these awards, please refer to Attachment A.
What is the new National Minimum Wage?
The National Minimum Wage will be increased to $772.60 per week or $20.33 per hour, operative from the first full pay period that starts on or after 1 July 2021.
Can the wage increase be absorbed into over-award payments?
Yes. If an employer pays above-award rates, then the wage increase can be absorbed into these over-award payments.
Does the wage increase apply to award/agreement free adult employees?
A National Minimum Wage Order applies to adult employees who are not covered by an award or enterprise agreement. The National Minimum Wage Order includes:
- The National Minimum Wage will increase as outlined above
- Casual employees receive a 25% loading.
Adult employees who are award/agreement free must not be paid less than the National Minimum Wage.
Does the wage increase apply to award/agreement free juniors, trainees and apprentices?
Yes, most juniors, apprentices and trainees are covered under an award or enterprise agreement and therefore the rates of pay in the relevant award or agreement apply.
Special national minimum wages for any award/agreement free juniors, trainees and apprentices are included in the National Minimum Wage Order.
Does the decision impact upon minimum wages for employees with a disability?
Yes. The following minimum wage arrangements apply to employees with a disability:
- Award-covered employees whose disability does not impact upon their productive capacity are entitled to the relevant modern award wage rate.
- Award-covered employees who are unable due to their disability to earn the full modern award wage rate are covered by supported wage provisions in modern awards.
- For award/agreement free employees with a disability, the National Minimum Wage Order contains two special national minimum wages for employees with a disability. The rate that applies depends on the extent to which their disability impairs their productive capacity.
Is there any change to the Superannuation Guarantee?
The Superannuation Guarantee will increase to 10 per cent effective from 1 July 2021.
Further advice or assistance
For further advice or assistance on this topic, or any workplace relations matter, Employment Plus clients who have placed two or more candidates have free access to the Ai Group Workplace Advice Line.
Call 1300 862 217 8.30am – 5.15pm AEST Mon-Fri