On 1 February 2021, the minimum wage in Australia is set to increase. Who does it apply to and what should you know? Read to learn more.
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The minimum wage varies across different countries, with some more generous than others. In accordance with the Annual Wage Review, Group 3 Award employees’ minimum wage increases on 1 February. Read this article to find out if this applies to you, and what you as an employer or employee can do moving forward.
For the official announcement from the government, read here.
What is minimum wage?
The National Minimum Wage (NWM) is the bare minimum pay standard set for all employees in Australia. If an employer fails to pay at or above the NWM, then they may be subject to severe legal ramifications. If you find yourself in this situation, read this article which explains step-by-step what an employee should do.
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What triggered the change?
The Annual Wage Review, mandated by the Fair Work Act 2009, is a national discussion that takes place once a year. They discuss important issues regarding Australian employees’ wages such as the national minimum wage and modern award minimum wages in each financial year. In the most recent one, they decided to increase the NWM by 1.75% across all Australian employees.
To learn about this decision in more depth, read this judgment from the Fair Work Commission.
Who does this wage increase affect?
The proposed 1.75% increase in minimum wage is applicable across 3 “groups” of awardees. It has been gradually rolled out in three stages, according to the Group number. While Group 1 and 2 Awards implemented the increases in July and November 2020, respectively, Group 3 Awardees will benefit from this third stage of minimum wage increases from February 2021. As an employee, you will benefit if your wage is linked to Awards such as the Commercial Sales Award, Fast Food Industry Award, Fitness Industry Award, General Retail Industry Award, Hospitality Industry (General) Award and Restaurant Industry Award. For the full list of 27 Awards, follow here.
How do I find out the minimum award rate for my job?
If you are unsure what the minimum award rate of your job is, please visit the Fair Work Ombudsman. You should use the Pay Calculator (PACT) which you will need to answer a series of questions regarding the nature of your job. You should answer as truthfully and as accurately as possible in order to calculate the correct minimum pay rates penalties and allowances eligible to you under that award.
After filling out the questionnaire, PACT will then tell you what your minimum wage is.
What do employers need to do?
You should be aware of the obligation to comply with increased minimum wage standards. You may elect to notify your employees of the expected change, in a written letter. Feel free to browse Lawpath’s legal document library for templates to find a similar letter such as this one designed for a general salary increase.
This factsheet by Employsure can help you to understand the necessary changes in more depth. To understand what employers should know about minimum pay in general, read the article here.
What do employees need to do?
Employees should be wary of these expected changes to the minimum wage. The projected increase in minimum wage should be reflected in the pay calculators, reportedly shortly after 21 January.
As a result of the Fair Work Commission’s most recent Annual Wage Review, the minimum wage increases by 1.75% on 1 February. This applies to all employees under Group 3 Awards. Both employers and employees should be aware of these changes. If minimum wage employees do not see a change in rate, they should consider taking formal steps as detailed above. For more tailored assistance, please do not hesitate to contact one of Lawpath’s employment lawyers via the Lawyer Marketplace.