National Minimum Wage and Modern Award Minimum Wages to increase by 2.5%

Yesterday, the Fair Work Commission (FWC) handed down its decision as part of its annual wage review announcing an increase of 2.5% to the national minimum wage and the minimum wage rates in modern awards.

From the first full pay period on or after 1 July 2021, the national minimum wage will be $772.60 per week or $20.33 per hour. This constitutes an increase of $18.80 per week.

However, like last year, modern award wages will increase in a staggered approach.

The modern award minimum wages are to operate from 1 July 2021 unless exceptional circumstances (mainly, the impact COVID-19 had in certain industries) justify a delay in the increase. For some modern awards the increase will take effect from 1 September or 1 November 2021.

The modern award stages will be as follows:

Group 1 – 1 July 2021

Includes:

  • Building and Construction General On-site Award 2020
  • Clerks—Private Sector Award 2020
  • Fast Food Industry Award 2010
  • Gardening and Landscaping Services Award 2020

We note this list is not exhaustive.

Group 2 – 1 September 2021

  • General Retail Industry Award 2020

Group 3 – 1 November 2021

  • Air Pilots Award 2020
  • Aircraft Cabin Crew Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Airport Employees Award 2020
  • Airservices Australia Enterprise Award 2016
  • Alpine Resorts Award 2020
  • Amusement, Events and Recreation Award 2020
  • Dry Cleaning and Laundry Industry Award 2020
  • Fitness Industry Award 2020
  • Hair and Beauty Industry Award 2010
  • Hospitality Industry (General) Award 2020
  • Live Performance Award 2020
  • Mannequins and Models Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Nursery Award 2020
  • Racing Clubs Events Award 2020
  • Racing Industry Ground Maintenance Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020
  • Sporting Organisations Award 2020
  • Travelling Shows Award 2020
  • Wine Industry Award 2020

Factors considered by the FWC in its decision

  • The FWC highlighted that the economy performed better than expected and the economic recovery was well underway, stating that “the Australian economy has recovered to a greater extent and more quickly than expected”.
  • The COVID-19 vaccine rollout will also have an impact in the recovery of the economy, increasing the likelihood of an end to social distancing, lockdowns and border restrictions, which will allow businesses and employees to return back to the workplace.
  • The superannuation increase by 0.5% (effective from 1 July 2021) was also taken into account when determining the rate of increase.

What does this mean for your organisation?

Organisations should be aware of the modern awards that may apply to their employees and ensure wages are paid pursuant to them.

Organisations will also have to make sure that employees on annualised salaries are not paid less than the amount the employee would have received under the applicable modern award.

We note that organisations that fail to pay wages in accordance with the national minimum wage order or requirements of a relevant modern award may be exposed to liability for breach of the Fair Work Act 2009 (Cth).

If you would like to discuss this further and the implications for your business please contact our Employment + Workplace Relations Partner, Erin Lynch.

The contents of this publication do not constitute legal advice and are for general information purposes only. You should seek legal advice regarding your particular circumstances.