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Key Points​
  • The Fair Work Commission has recently handed down its decision on the Annual Wage Review 2018–19.
  • With effect 1 July 2019, the national minimum wage and the modern award minimum wage will increase by 3%
Background
The Fair Work Commission (FWC) is responsible for reviewing and setting the national minimum wage and the modern award minimum wage. Each financial year the FWC conducts an annual wage review, and issues a decision and national minimum wage order for employees not covered by an award or agreement.

Award Covered Employees
Employees who are covered by an award will have their award base rates increased by 3% with effect from the first pay period starting 1 July 2019. The FWC’s pay guides have the current minimum pay rates for full-time, part-time and casual employees in an award, so be sure to check again for the soon to be published 2019-20 pay guide rates.
 
National Minimum Wage (employees not covered by an award or an agreement)
The national minimum wage will increase to:

  • $740.80 per week; or
  • $19.49 per hour.
This represents a $21.60 increase to the national minimum wage each week for award-free employees.
 
Employees Covered by Enterprise Agreements and Employers Paying Above Award/Minimum Wage Rates
Please note:
  • employers who have enterprise agreements (EAs) in place, the terms of the EA determine what, if any, pay rise has to be applied to covered employees; whilst.
  • employers who pay rates higher than the minimum prescribed award rates and minimum wage rates may well NOT have to pass on the 3% increase. However, employers should check that the rates being paid to employees are higher than the mandated 3% increase AND employers should check employment contracts to verify that no other pay increase obligation is owed to employees.
Takeaway
Employers will have to comply with the FWC’s annual wage review decision from the start of the first full pay period on or after 1 July 2019.
 
To avoid underpayment claims, employers:
  • who know which award applies, should keep an eye out for the FWC’s award pay guides which will be updated to reflect the wage increase decision in the near future; OR
  • who are not sure what, if any award, covers their employees, can speak to one of our Workplace Relations team members today, who are specialists in walking employers through the award coverage and worker classification maze!
 Post by Warwick Ryan and Saasha Greeney

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