By Bethany Silverman

On 16 June 2021, the Fair Work Commission’s Minimum Wage Panel (FWC) handed down its decision on the annual wage review. The decision provides an increase of 2.5 per cent to the National Minimum Wage, effective from the first full pay period after 1 July 2021. However, similar to the decision in 2020, taking into consideration the impact of the COVID-19 pandemic, the increases to modern award rates will be staggered. Modern awards have been grouped into three ‘clusters’, being lagging recovery, almost recovered, and fully recovered.

Factors

As the COVID-19 pandemic continues to evolve throughout Australia, the decisions surrounding wage increases have been particularly complex. In making this decision, the FWC took into account economic and social considerations including:

  • Relevant industry specific data;
  • The period of time between successive review increases; and
  • The likelihood that future lockdowns will be of limited duration and localised; comprising of stay-at-home orders localised to particular regions with limited reasons for people to leave their home.

It also considered the various positions and submissions of the Australian Government, State Governments and interested parties, including employee associations, and employer associations.

The groups

The decision splits the operative date of the minimum wage increase based on whether an industry remains, based on research and submissions, affected by the pandemic. The groups, and operative dates are outlined in the table below.

When will the increases be effective? 

Group Modern Awards Date of Increase
1 All Modern Awards except those in group 2 and 3 below 1 July 2021
2 • General Retail Industry Award 2020 1 September 2021
3 • Air Pilots Award 2020

• Aircraft Cabin Crew Award 2020

• Airline Operations – Ground Staff Award 2020

• Airport Employees Award 2020

• Airservices Australia Enterprise Award 2016

• Alpine Resorts Award 2020

• Amusement, Events and Recreation Award 2020

• Dry Cleaning and Laundry Industry Award 2020

• Fitness Industry Award 2020

• Hair and Beauty Industry Award 2010

• Hospitality Industry (General) Award 2020

• Live Performance Award 2020

• Mannequins and Models Award 2020

• Marine Tourism and Charter Vessels Award 2020

• Nursery Award 2020

• Racing Clubs Events Award 2020

• Racing Industry Ground Maintenance Award 2020

• Registered and Licensed Clubs Award 2020

• Restaurant Industry Award 2020

• Sporting Organisations Award 2020

• Travelling Shows Award 2020

• Wine Industry Award 2020.

1 November 2021

Next steps

Following this wage increase, employers will be required to:

  • Review the wages of their employees;
  • Ensure that processes are in place to implement the required changes;
  • Consult with employees to ensure that they are aware of changes that apply to them.

In the event your employees are covered by an enterprise agreement, it is important to ensure that the base rates in those agreements remain at least equal to the new minimum Modern Award rates.

Need help?

HR Assured appreciates the challenging economic environment in which businesses are currently operating and can help you understand how this decision affects your business. If you would like assistance in understanding how minimum wages work, auditing and calculating pay rates and assisting you with implementing an appropriate strategy, please contact us.

For HR Assured clients, contact our 24/7 Telephone Advisory Service.

Not an HR Assured client and need some advice? The team at HR Assured can support your business on a range of workplace matters. Contact us today to arrange a confidential, no-obligation chat.

Bethany Silverman is a qualified Senior Workplace Relations Consultant at FCB Group and HR Assured. She regularly provides advice to a wide range of businesses in respect of compliance with workplace laws and managing complex matters including disciplinary and performance management processes and terminations