IR Alert – June 2014 – Increase to the Minimum Wage

IR Alert – June 2014 – Increase to the Minimum Wage

updates

26 June 2014

As many employers will now be aware, the Fair Work Commission has handed down its decision to increase all Award rates of pay by 3% effective from the beginning of the new financial year.

What this means is as of Tuesday, 1 July 2014, the 3% increase to the minimum wage will come into effect.

The Fair Work Commission also announced that the new national minimum wage will be $640.90 per week or $16.87 per hour. The national minimum wage applies to employees who are not covered by a Modern Award or agreement.

The new national minimum wage and new minimum wages in Modern Awards start to apply from the first pay period starting on or after 1 July 2014.  Accordingly, as of 1 July 2014, all employers must:

  • Know what wages apply to all of their employees from the first pay period on or after 1 July 2014;
  • Know what impact the increased minimum wage has on any allowances, casual loadings and penalty rates they pay to their employees; and
  • Update all employees’ pay slips and wage records to reflect the new minimum rates.

HR Law cautions employers who are paying employees above minimum Modern Award rates or under a Collective Agreement or Enterprise Agreement not to assume that the higher rates they are currently paying will not be affected by the minimum wage increase.  The minimum wage increase affects all wages, allowances, loadings and penalty rates.  Further, employers who have a Collective Agreement or Enterprise Agreement in place will need to ensure the base rates in their agreements are not less than the relevant Modern Award rates of pay.  If employers fail to apply the increases on 1 July 2014, any amount underpaid will need to be back-paid to their employees.

Any employer who is concerned about the wage increase, or how it may impact their business, should contact HR Law immediately.

As many employers will now be aware, the Fair Work Commission has handed down its decision to increase all Award rates of pay by 3% effective from the beginning of the new financial year.

What this means is as of Tuesday, 1 July 2014, the 3% increase to the minimum wage will come into effect.

The Fair Work Commission also announced that the new national minimum wage will be $640.90 per week or $16.87 per hour. The national minimum wage applies to employees who are not covered by a Modern Award or agreement.

The new national minimum wage and new minimum wages in Modern Awards start to apply from the first pay period starting on or after 1 July 2014.  Accordingly, as of 1 July 2014, all employers must:

  • Know what wages apply to all of their employees from the first pay period on or after 1 July 2014;
  • Know what impact the increased minimum wage has on any allowances, casual loadings and penalty rates they pay to their employees; and
  • Update all employees’ pay slips and wage records to reflect the new minimum rates.

HR Law cautions employers who are paying employees above minimum Modern Award rates or under a Collective Agreement or Enterprise Agreement not to assume that the higher rates they are currently paying will not be affected by the minimum wage increase.  The minimum wage increase affects all wages, allowances, loadings and penalty rates.  Further, employers who have a Collective Agreement or Enterprise Agreement in place will need to ensure the base rates in their agreements are not less than the relevant Modern Award rates of pay.  If employers fail to apply the increases on 1 July 2014, any amount underpaid will need to be back-paid to their employees.

Any employer who is concerned about the wage increase, or how it may impact their business, should contact HR Law immediately.

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