Insights

In brief - Minimum wage, penalty rates, enterprise agreements, high-income threshold and compensation limit to be affected

On 1 July 2018, a range of monetary changes to workplace laws commence that will impact on all employers in Australia.

Minimum wage increases

On 1 June 2018, the Fair Work Commission Minimum Wage Panel determined in its Annual Wage Review 2017-18 that from the first full pay period after 1 July 2018:
  • minimum rates of pay for adult full-time employees covered by modern awards will increase by 3.5%
  • the national minimum wage for an award-free adult employee will increase to $719.20 per week, or $18.93 per hour
The decision also impacts allowance and expense amounts referred to in modern awards.

Penalty rates

There will be further reductions to Sunday penalty rates in hospitality and retail awards from 1 July 2018, following a decision from the Fair Work Commission last year in its 4 yearly review of modern awards - Penalty Rates - Transitional Arrangements.

Enterprise agreements

Employers who have an enterprise agreement in operation (even if it has passed its nominal expiry date) must ensure that the base rate of pay in the agreement does not result in any employee being paid less than the relevant modern award pay rate or, if no award applies, the national minimum wage. 
 
For more on enterprise agreements, read my latest article titled Enterprise agreement wage growth trends.

Increase to the high-income threshold and compensation limit

In addition to increases to minimum wages, from 1 July 2018, two other important monetary figures will increase:
  1. The high-income threshold increases from $142,000 to $145,400. This amount affects how a modern award applies to an employee, and affects an employee’s access to the unfair dismissal jurisdiction of the Fair Work Commission.
  2. The compensation limit under unfair dismissal laws also increases to $72,700. The compensation limit is the maximum compensation available to an employee successful in an unfair dismissal claim.

Your obligations as an employer and penalties for non-compliance

Employers need to be aware of these changes when determining wages, assessing unfair dismissal eligibility and workplace law compliance. Penalties of up to $126,000 apply to employers who fail to meet these obligations. 
 
Seek advice if unsure of your obligations.

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal advice. Please seek your own legal advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​

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