Annual Wage Review

On 6 June 2017, the Full Bench of the Fair Work Commission handed down its annual wage decision, which is a yearly review of the National minimum wages in modern awards for each financial year.   The Commission held that rates of pay under the National minimum wage and all modern awards would be increased by 3.3 percent.

This decision means that the National minimum wage will be increased to $694.90 per week, or $18.29 per hour. This is an increase of $22.20 per week, or 59 cents per hour. The various rates across modern awards will also be increased accordingly.

The decision will directly affect employees who have their rate of pay set under the National minimum wage or under a modern award. The Commission estimates the decision will affect 2.3 million employees. It will not affect employees employed under enterprise agreements (unless the applicable modern award base rate is higher than the enterprise agreement rate) or those employees receiving higher benefits under a contract of employment.

The new rates of pay will come into operation from the first full pay period on or after 1 July 2017.

Implications

This increase is relevant for employers considering making enterprise agreements in the context of satisfying the ‘better off overall test’ for agreement approval on or after 1 July 2017. Employers should also review the rate of pay for any employees whose salary is based upon the National minimum wage or a modern award. If an increase in an employee’s rate of pay is required by the decision, their wages must be adjusted from the first full pay period on or after 1 July 2017.

The link for the full decision:

https://www.fwc.gov.au/documents/sites/wagereview2017/decisions/2017fwcfb3500.pdf