The Fair Work Commission (FWC) has today handed down its annual wage review decision. The decision will increase the national minimum adult wage by 3.5%. This increase will be applicable from the first full pay period commencing on or after 1 July 2018.
The new national minimum adult wage will be $719.20 per week or $18.93 per hour. This constitutes an increase of $24.30 per week to the weekly rate, or effectively 64 cents per hour.
Employer to do list
No changes take effect until the first full pay period on or after 1 July 2018.
Award Covered Employees
This increase will flow into all Modern Awards rates of pay in the coming weeks when finalised by the Fair Work Commission.
Any employer who pays their employees at the minimum Award rate of pay will be required to increase pay rates by 3.5% from the first full pay period on or after 1 July 2018. Weekly wages within Awards will be rounded to the nearest 10 cents as part of the process of applying the increase.
Above-Award Paid Employees
The incoming increases to the Award rates of pay can be absorbed into an employee’s current rates of pay as long as the result leaves their rate of pay at least equal to the increased Award minimum rates.
Award-free Employees
An employer who has Award free adult employees must pay them at least the new National Minimum Wage rate from the first full pay period on or after 1 July 2018.
An employer with Award free junior employees must pay those employees at the appropriate percentage of the National Minimum Wage rate from the first full pay period on or after 1 July 2018.
Enterprise Agreements
Employers with enterprise agreements will need to ensure that the base rates of pay in their enterprise agreements are at least equal to the relevant rate in respective Awards as increased by the decision.
Individual Flexibility Agreements
Employers with Individual Flexibility Agreements need to ensure employees are “better off overall” when compared to the applicable Award.
Salaried Award Covered Employees
Award covered employees paid annualised salary must ensure that the employee’s annualised salary remains sufficient to absorb the increased Award-based monetary entitlements, and make adjustments upward where necessary.
What next?
The Fair Work Commission will now commence issuing draft determinations and orders about how this decision affects modern awards and then update the pay rates in each award. This process usually takes the Commission a few weeks to complete. As usual we would expect the updated rates of pay to be available from about the 3rd week of June. We will release our award summaries for subscribers shortly thereafter.
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