What every employer MUST know for 1 July 2017
With the commencement of a new financial year, it brings with it important changes and new rates which will apply from 1 July 2017.
NEW! High Income Threshold (HIT)
With the HIT:
- it is expected to increase to $143,500 (subject to formal confirmation by the FWC)
- it impacts:
- who can make a claim for unfair dismissal (for those not covered by a Modern Award or to whom an enterprise agreement does not apply)
- the maximum amount of compensation payable in an unfair dismissal claim
- those on a ‘guarantee of annual earnings’ (a Modern Award does not apply to an employee whilstever this guarantee is in place provided it continues to meet the relevant legislative requirements)
NEW! Modern Award Increases
With Modern Awards (including enterprise awards):
- minimum wages increase by 3% (starting on the first full pay period on or after 1 July 2017)
- absorption of wage increases into over-award payments is permissible (subject to the terms of the relevant employment agreement and what other amounts are being absorbed into any annualised salary)
- increases to the minimum wages of junior workers, apprentices, trainees, piece workers and employees on the supported wage system will occur
- expense-related allowances in Modern Awards will increase as set out in the Modern Award (eg, by the applicable CPI index figure)
- annualised salaries will need to be checked to ensure they can still properly absorb/include all relevant minimum Modern Award amounts and that they continue to meet the technical requirements of the Modern Award
NEW! National Minimum Wage (NMW)
With the NMW:
- this is applicable to employees to whom neither a Modern Award or enterprise agreement applies
- the NMW increases by 3% to become $694.90 per week or $18.29 per hour
- in addition:
- special NMW rates apply to employees with disabilities, junior employees, apprentices, and those on training arrangements
- the minimum casual loading remains unchanged at 25%
NEW! Impact on Enterprise Agreements
With enterprise agreements:
- they must always meet or exceed the minimum wage of:
- the relevant Modern Award (ie, the Modern Award that would have applied had the enterprise agreement not been in existence)
- the NMW (ie, where a Modern Award would not apply even if the enterprise agreement was not in existence)
- thus, pay rates in enterprise agreements may need to be increased (even if the enterprise agreement has its own wage increase regime)
NEW! The Sting
Be mindful that wage increases may have flow-on effects such as increasing:
- the value of leave loading, penalty rates, overtime and superannuation contributions
- the value of accrued leave entitlements
- the cost of wage related expenses such as payroll tax and workers compensation premiums
NEW! Redundancy
The tax-free component of a genuine redundancy payment increases to be:
- a base amount of $10,155
- an additional amount of $5,078 for each completed year of service
NEW! Superannuation Contributions Base
With superannuation:
- the maximum superannuation contribution base increases to $52,760 per quarter ($211,040 per annum)
- an employer is not required to make superannuation contributions on behalf of employees on earnings in excess of that maximum contribution base
Questions/Assistance
If you have any questions or would like any assistance, please feel free to speak with or email a member of our Matthews Folbigg Workplace Solutions team on (02) 9635 7966 or jcc@matthewsfolbigg.com.au [...]
