Last week the Fair Work Commission’s expert panel for annual wage reviews handed down the Annual National Wage Case Decision.

In their decision, FWC confirmed an increase to Modern Award wages and the National Minimum Wage.

Important elements of the Decision include:

  • An increase to the national minimum wage of 3.5% per week, resulting in a new national minimum wage of $719.20 per week. This equates to $18.93 per hour (an increase of $0.64 per hour)
  • An increase to all Modern Awards of 3.5% with weekly rates rounded to the nearest 10 cents.

These increases will come into effect on the first of July 2018, with the new rates needing to be implemented in the first full pay period on or after the 1st of July 2018.

In the next few days the Commission will publish draft Modern Award wage tables and will confirm the updated rates of pay prior to the effective date of the decision.

For all Employers and clients operating under Modern Awards you will need to check and increase your rates accordingly in light of the decision.

As a guide everyone should check their current Award rates in the following circumstances:

  1. You are currently paying the minimum Award rates to your Award covered employees
  2. You are currently paying slightly above the Award, you should now check to ensure that your employees are still better off overall under your agreements
  3. You are using a flat rate that includes an above award component to compensate for overtime, penalties etc, you will need to re-conduct the BOOT test to ensure your all in rate is still valid and lawful
  4. You have an EBA in force or that has expired, and you need to check your pay rates are in line with the latest increase

If you are currently paying well above Award rates you may get asked by your employees whether they are entitled to this 3.5% pay increase. The answer is that you are not obligated to pass this increase on to these employees but if this means they are getting very close to the minimum you may want to consider increasing their wage or salary to ensure you retain them within your business and that they are being pay a fair market rate.

If you need assistance checking or increasing your pay rates or conducting a BOOT test, please get in touch.

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