Author: Lehanne Bleumink, Gold Seal HR Services Manager.
Each year the Fair Work Commission carries out an annual minimum wage review. While the Fair Work Commission rejected calls to freeze the minimum wage this year (finding this would effectively cut wages and put relevant workers at greater risk of poverty), the 2020 annual wage review has been announced. Increases to awards will start on 3 different dates for different groups of awards.
The decision increases minimum weekly wages by 1.75%, taking the minimum wage to $753.80 per week or $19.84 an hour (currently $740.80 per week, or $19.49 an hour). This will apply to all award wages. In light of the uncertain economic environment, the rise will take effect on 1 July 2020, except for modern awards that have been particularly affected by COVID-19.
The increase to awards will happen in 3 groups as follows:
- Group 1 awards from 1 July 2020
- Group 2 awards from 1 November 2020
- Group 3 awards from 1 February 2021
The Banking Finance and Insurance Award 2020 is a Group 1 award, so the increase will be effective from the first full pay period on, or after 1 July 2020. Fair Work is yet to update modern awards; updated rates should be available by 1 July 2020. In the meantime, for budgeting purposes, if you have employees paid according to the modern award rate you can calculate a 1.75% increase.
For employees paid above the award rate, an employer is not obligated to pass on the 1.75% increase – however, it is important to ensure the employee remains either equal to, or above the new award rate. For those full time employees paid an annualised wage, the calculation will need to be done to confirm they remain above the equivalent award rate. A record of this calculation is required as part of the annualised wage requirements.
Keep your eye out for the July HR news article which will contain further information.
For further clarification on the above, or assistance in any HR/IR matter, please call Gold Seal on 03 9510 5100 or email us at email@example.com