LEGAL ALERT
Fair Work Commission Announces Rise to Minimum Wage
5 June 2018
The Fair Work Commission has delivered its annual minimum wage decision, raising it by 3.5% to $719.20 a week or $18.93 an hour, from 1 July 2018. The various rates across modern awards will also be increased.
The $24.30 a week rise is well below the $50 sought by the ACTU, but almost double the 1.9% increase argued for by the Australian Chamber of Commerce and Industry.
In making its decision, the Panel consisting of President Justice Ross, Vice President Hatcher, Deputy President Asbury, Commissioner Hampton, Mr Cole, Professor Richardson and Mr Gibbs said that ‘low wages growth has significant economic and social consequences… sustained low wages growth diminishes the sense of shared prosperity’.
The Panel added ‘the prevailing economic circumstances provide an opportunity to improve the relative living standards of the low paid, and to enable them to better meet their needs’.
IMPLICATIONS
This decision will directly affect employees who have their rate of pay set under the National minimum wage, under a modern award or in some cases under an enterprise agreement. Employees employed under enterprise agreements will not generally be affected (unless the applicable modern award base rate is higher than the enterprise agreement rate or the enterprise agreement rates are ‘tied’ to modern award rates).
Once the rates have been updated by the Fair Work Commission in two to three weeks’ time, employers should review the rate of pay for employees whose wages are based on the National minimum wage or a modern award. If an increase in an employee’s rate of pay is required by the decision, their wage must be adjusted from the first full pay period on or after 1 July 2018.
Employers considering making enterprise agreements should also turn their minds to the increase in order to satisfy the ‘better off overall test’ for agreement approval on or after 1 July 2018.
The full judgment can be found at: https://www.fwc.gov.au/documents/sites/wagereview2018/decisions/2018fwcfb3500.pdf
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