Get ready for a 1.75% increase to base pay rates
The Fair Work Commission (FWC) has announced a 1.75% increase to minimum wages following its 2020 Annual Wage Review. The new National Minimum Wage (NMW) will be $753.80 per week or $19.84 per hour. The increase applies to base pay rates from the first full pay period starting on or after 1st July 2020. This constitutes an increase of $13.00 per week to the weekly rate or 35 cents per hour to the hourly rate.
Bookkeeping
The wage increase takes effect in a staged implementation. It applies to the first full pay period after the relevant start date.
Example: For those awards with a 1st July 2020 start date; if the employees are normally paid on the 3rd July for the pay period 29th June to 3rd July, this would be at the current rate. The increase would apply from the pay period commencing on 4th July.
Check all allowances, penalty rates and base rates of pay are increased appropriately in software as required.
Staged Implementation
The 1.75% increase will apply to minimum rates in Modern Awards in 3 stages from the first full pay period after the group date.
Group 1 Awards – from 1st July 2020
Frontline Heath Care & Social Assistance Workers
Teachers and Child Care
Other Essential Services
For a complete list of awards in Group 1 please refer to below link:
Group 2 Awards – from 1st November 2020
Construction
Manufacturing
A range of other industries
For a complete list of awards in Group 2 please refer to below link:
Group 3 Awards – from 1st February 2021
Accommodation and Food Services
Arts and Recreation Services
Aviation
Retail
Tourism
For a complete list of awards in Group 3 please refer to below link:
What do I need to do?
The FWC is working on updating their pay tools with the new rates and Group 1 Awards should be ready by 1st July 2020. Ensure your business is ready to pay the increase to employees as at the appropriate date.
Who does the increase apply to?
The change only applies to employees that derive their pay rates from the national minimum wage, a modern award or in some cases a registered agreement.
Most employees are covered by an award. If you're not sure which award applies to you or your client's employees, you can use Find my award on the Fair Work website.
Parental Leave Pay
Parental Leave Pay is generally increased in line with the national minimum wage; however, we are waiting on updates on their website to confirm the increase to PPL from 1st July 2020.
Source: ICB