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Australia’s lowest-paid workers to get the biggest wage increase in more than a decade

Australia’s lowest-paid workers to get the biggest wage increase in more than a decade

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The Fair Work Commission’s Minimum Wage Panel (FWC) handed down its decision on the annual wage review today. The decision provides an increase of 5.2 per cent to the National Minimum Wage, taking it to $21.28 per hour, effective from the first full pay period commencing on or after 1 July 2022.

The increase to Modern Award minimum wages is $40 per week for classification levels with a weekly wage rate of less than $869.60 per week and 4.6 per cent for all classification levels paying $869.60 per week and above. The increases to Modern Award rates will be staggered for awards in the aviation, tourism, and hospitality industries, meaning these increases (which includes increases to the Restaurant Industry Award 2020, Hospitality Industry Award 2020 and Registered and the Licensed Clubs Award 2020), will be effective from the first full pay period commencing on or after 1 October 2022.

For all other Modern Awards, the minimum rates will also increase effective from the first full pay period commencing on or after 1 July 2022.

In reaching its decision, the FWC considered both economic and social factors including:

  • a sharp rise in the cost of living;
  • a strong improvement in the labour market;
  • the risk of increases resulting in further inflationary pressure;
  • changes to superannuation;
  • 2022/23 budgetary measures; and
  • the economic conditions, both currently and those projected for the 2022/23 financial year.

FCB will soon be able to share comprehensive wage tables for most awards and occupations.

Recommended next steps:

Employers should undertake the following steps:

  • review minimum rates of pay, terms and conditions for Award covered employees and process increases from the first full pay period in July if necessary;
  • review the salary of Award covered employees to ensure that the salary continues to result in the employee being better off as compared to what the employee would have received under the Award;
  • review the base rates of pay provided under any enterprise agreement to ensure that the base rate of pay is at least equivalent to the updated base rate of pay under the Award; and
  • engage and inform team members who will be undoubtedly receiving information from the media.

If you have any questions about the minimum wage increase and what this means for your business, please contact the team at FCB here.