In brief - The Fair Work Commission's Wage Review Panel (the Panel) handed down its 2018/19 minimum wage review on 30 May, awarding a 3% increase in the minimum wage and in modern award rates of pay effective from 1 July 2019
New national minimum wage
The national minimum wage (NMW) will increase to $19.49 per hour or $740.80 per week (previously $18.93 per hour or $719.20 per week), a rise of $21.60 per week.
The Panel's decision reflects the smallest increase in the last three years and is less than the proposed 6% increase (or additional $43 per week) which the ACTU submitted was necessary to establish a "living wage" when coupled with a further 5.5% increase in 2020.
In contrast, employer organisations were seeking a modest minimum wage increase in line with the Consumer Price Index. On average, employers submitted an increase of between 1.8% and 2% was appropriate, with a number advocating that any increase should be no more than 1.8%.
In its decision, the Panel noted its concern that the sizeable increase being sought by the ACTU would create a "significant risk of disemployment", whereas it was satisfied a 3% increase would not lead to adverse inflationary outcomes or have a measurably negative impact on employment, while still delivering an improvement of living standards for employees dependent upon the NMW/award rates of pay.
How the increase in the national minimum wage will impact enterprise agreements
Employers who have an enterprise agreement in operation (including those that have passed their 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 NMW.
Your obligations as an employer and penalties for non-compliance
Employers need to be aware of these changes when determining wages and ensuring workplace law compliance. Penalties of up to $12,600 per contravention for an individual and $63,000 per contravention for companies apply to employers who fail to meet these obligations. In the case of a serious contravention, penalties can rise to up to $126,000 and $630,000 per contravention respectively.
This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2020.