FWC Annual Wage Review Decision 2023-2024
The Fair Work Commission’s Expert Panel has awarded a 3.75% increase to the National Minimum Wage and the minimum wages in Modern Awards.
Accordingly, the National Minimum Wage will be increased to $915.90 per week or $24.10 per hour and all Modern Award minimum weekly wages will be increased by 3.75% from the first full pay period commencing on or after 1 July 2024.
Application of the Increase to the National Minimum Wage and Modern Awards
The increase applies to minimum wages for all employees, including junior employees, trainees, apprentices, supported wages and piece rates. 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.
What factors did the Panel consider?
The Panel advised that key factors from current economic circumstances presented clear guidance for this year’s Decision. These factors include living standards, the needs of low paid Australians, workforce participation and striving for gender equality. The Panel further noted that lower inflation, no real change to labour productivity and a relatively strong labour market and profit growth in a majority of sectors, were also key considerations in reaching this year’s Decision.
The Panel also highlighted their consideration of upcoming cost of living relief which will directly assist those employees who are reliant on Modern Award wages. These measures include upcoming tax cuts, increase to minimum superannuation contributions from 11% to 11.5% and other proposed measures, such as the Energy Bill Relief Fund.
The Panel confirmed that this year’s Decision is broadly aligned with forecasted wage increases across the general market and expected lower inflation in 2025.
The Panel indicated that approximately 20.7% of employees in Australia are paid in accordance with Modern Award wages, with four key sectors heavily reliant on these wages. The four key industry sectors which contain the largest proportions of modern award reliant employees are Accommodation and food services, Health care and social assistance, Retail trade and Administrative and support services. The Panel reiterated, as they have done in previous years, that typically these employees work part-time or casual hours and are predominantly female.
In accordance with their commitment to addressing gender equity in the Australian workforce, the Fair Work Commission announced the successful completion of their research into gender undervaluation which has brought to light various priority areas. Specific employees highlighted in these priority areas included early childcare workers, disability home care and other social care employees, and medical support professions, such as dental assistants, psychologists and pharmacists. The Panel confirmed that by next year’s Annual Wage Review Decision, they will have undertaken proceedings to address gender undervaluation and will provide further guidance at that time.
Interested to learn more?
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 ASAP.