FWC announces 5.2% increase to National Minimum Wage

The Fair Work Commission’s Expert Panel has awarded a 5.2% increase to the national minimum wage; whilst employees covered by Modern Awards will receive an increase of at least 4.6%.

The Panel determined a 5.2% rise to the national minimum wage, where those paid the national minimum wage will receive $812.60 per week or $21.38 per hour, will take effect from 1 July 2022. This constitutes an increase of $40 per week to the weekly rate or $1.05 per hour to the hourly rate.

With consideration to Modern Award covered employees, the Panel determined that Modern Award wage rates above $869.60 will receive a 4.6 per cent adjustment and wage rates below $869.60 will be increased by $40 per week ($1.05 increase per hour).

Similar to the approach used last year, the increase will apply to select Modern Awards at a later operative date as a continued attempt to accommodate certain industries who continue to be significantly impacted by the adverse effects of the COVID-19 Pandemic.

In arriving at their decision, the Fair Work Commission confirmed that they considered the sharp rise in cost of living and improvement in labour market over the last financial year. They were of the view that these considerations weighed in favour of a higher increase in comparison to the 2.5% minimum wage increase awarded last year.

The Commission determined that the national minimum wage and the majority of Modern Awards would demonstrate the relevant increase from the first full pay period commencing on or after 1 July 2022, unless specified below. The Commission noted that this may result in some Modern Awards receiving two wage increases within a 12 month period. However, they were not satisfied that this was justification for delaying an increase given affected businesses had the benefit of a delayed operative date arising from last year’s decision.

The Panel was satisfied that there were exceptional circumstances that justified providing later operative dates for increases to select Modern Awards within the aviation, tourism, and hospitality sectors.

The minimum wage increase for the following Modern Awards will operate from the first full pay period commencing on or after 1 October 2022:

• Aircraft Cabin Crew Award 2020
• Airline Operations – Ground Staff Award 2020
• Air Pilots Award 2020
• Airport Employees Award 2020
• Airservices Australia Enterprise Award 2016
• Alpine Resorts Award 2020
• Hospitality Industry (General) Award 2020
• Marine Tourism and Charter Vessels Award 2020
• Registered and Licensed Clubs Award 2020
• Restaurant Industry Award 2020

The increase applies to minimum wages for all adult classifications. Weekly wages will be rounded to the nearest 10 cents.

If an Enterprise Agreement applies to an employee and the employee would otherwise be covered by a Modern Award, then the employee’s base rate of pay under the Enterprise Agreement must not be less than the base rate of pay that would be payable to the employee under the Modern Award.

If an Enterprise Agreement applies to an employee and the employee is not covered by a Modern Award, then the employee’s base rate of pay under the Enterprise Agreement must not be less than the national minimum wage.

If no Enterprise Agreement or Modern Award applies to an employee, then the employee cannot be paid less than the national minimum wage.

The Australian Government submitted that the Panel should ensure that the real wages of low-paid workers do not go backwards.  The wage submissions from the major industrial bodies were as follows:-

• ACCI, AiGroup and ABI proposed an increase of 2.5-3%;
• ACTU suggested a 5.5% increase; and
• ACCER suggested a 6.5% increase.

If you would like more information on the impact that the minimum wage increase might have to your organisation, please contact us here and a Mapien Workplace Strategist will be in touch within 24 hours.