The Minimum Wage Panel (“Panel”) has today handed down its tenth minimum wage decision which increased the National Minimum Wage, together with all Modern Award minimum rates of pay, by 3.0%. The ACTU called for a $43.15 a week increase arguing it was incumbent on the Panel make a decision that would lead the market and make meaningful progress towards the living wage.

However, the Panel advised the 3.0% increase more closely reflects an adequate increase taking in consideration the economy has performed relatively well, strong employment growth, and that no adverse employment affects have been identified as a result of the previous two decisions.

The Panel reasoned that low wage growth has a significant economic and social consequences and that it was appropriate to provide a wage increase to allow those who have their wages set by the National Minimum Wage and Modern Awards to better meet their needs.

From 1 July 2019, the National Minimum Wage will increase to $740.80 per week, or $19.49 per hour.

What this means for you:

  1. Employers who pay their employees at the National Minimum Wage or Modern Award rates of pay will need to apply the increase in the first full pay period commencing on or after 1 July 2019;
  2. Employers who currently pay above National Minimum Wage or Modern Award rates of pay are not obliged by this decision to increase their rates of pay, but need to ensure their rates remain at least as beneficial, once the increase is applied; and
  3. Employers who pay under enterprise agreements must ensure that the base rates in those agreements remain at least equal to the new minimum Modern Award rates.

Annualised Salaries and Individual Flexibility Agreements

If you have implemented Individual Flexibility Agreements, you will need to reassess those agreements to ensure employees remain “better off overall” when compared to the newly increased Modern Award rates.

If you pay any of your employees under annualised salary arrangements you will need to conduct an audit of those annualised salaries against the new Award rates and working patterns to ensure the annual salary compensates for award entitlements.

For more information on the minimum wage increase, clients should contact the HR Assured team.