Fair Work Commission Annual Review 2022 - 23


There has been an important update regarding the decision made today (2 June 2023) by the Fair Work Commission regarding the Annual Wage Review.

Hicksons understands the significance of this decision for businesses and wants to ensure that employers are well-informed about its implications. Approximately 20.5% of Australian employees are paid in accordance with minimum wage rates in modern awards.*
The Fair Work Commission has conducted a thorough review and has decided to increase all modern award minimum wage rates by 5.75%, effective from the first full pay period on or after 1 July 2023.
The new minimum wage rate is $23.23 per hour or approximately $45,902 per year and is applicable to employees who are not covered by a modern award or enterprise agreement – affecting 0.7% of Australian employees. The Fair Work Commission also increased the minimum wage to 5.75%, however as the minimum wage will now be based on the C13 rate ($21.97) in the Manufacturing and Associated Industries and Occupations Award 2020, rather than the C14 rate ($21.38) that has previously applied, this actually equals a one-off higher increase totalling 8.6%. The increase will also come into effect on the first full pay period on or after 1 July 2023. This decision is aimed at maintaining a fair and equitable work environment for employees, while considering economic conditions and business sustainability.
As a result of this decision, there may be an impact on your business, if you pay your workers less than 5.75% above the award rate. The impact will be even greater for the few employers that have employees who receive the minimum wage and are not covered by a modern award or enterprise agreement (as their increase is 8.6%). It is important to review your current wage structure and ensure compliance with the new minimum wage rates mandated by the Fair Work Commission.

Here are a few key points to consider:

  • Minimum Wage Adjustment: The decision may require you to adjust the wages of employees who currently earn at or below the new minimum wage rates and are not covered by a modern award or enterprise agreement. It is crucial to assess your payroll records and identify employees who may be affected by these changes.
  • Budget forecasting: Take the time to review your budget and financial projections to accommodate any necessary wage adjustments. It is important to ensure that your business remains financially sustainable, while meeting your obligations under the new wage rates.
  • Employment Agreements and Contracts: Review your employment agreements and contracts to ensure that they align with the new minimum wage rates. Any necessary updates or revisions should be made to comply with the Fair Work Commission's decision
  • Communication with Employees: Transparent and effective communication with your employees is vital during this transition period. Clearly communicate any changes in wage rates and ensure that your employees understand the reasons behind the adjustments. It may also be good to address any questions or concerns they may have to maintain a positive work environment.

Hicksons understands that navigating these changes can be complex, and weare here to support businesses throughout this process. Our team of experts is available to provide guidance, answer any questions you may have, and assist you in implementing the necessary adjustments.

 *Fair Work Commission Annual Wage Review 2022-23

Please feel free to reach out to Warwick Ryan, Partner or Sarah Bandyle, Practice Manager, Workplace Relations, Employment & Safety, if you require any further information or assistance.
Find out more about our Workplace Relations, Employment and Safety services here.

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