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Fair Work Commission – Minimum Wage to Increase by 3.3%

Background

On 6 June 2017, The Fair Work Commission announced a 3.3% increase to the national minimum wage and minimum award wages.

The Fair Work Commission Decision

In essence:

  • The national minimum wage will now be $694.90 per week, or $18.29 per hour
  • This is an increase of $22.20 per week to the weekly rate and 59 cents per hour to the hourly rate
  • The changes will be effective 1 July 2017

Fair Work Commission’s Reasoning – Economics & Worker Poverty

  • The Fair Work Act required the Fair Work Commission to take into account economic considerations
  • However, they were satisfied that the level of increase decided upon would not lead to inflationary pressure and would be highly unlikely to have any measureable impact on employment or lead to job losses
  • They based these conclusions on findings that productivity growth has risen sharply and profit growth had been “particularly strong” in 2016 compared to previous years. Consequently, business conditions were positive and above long-term averages
  • The Fair Work Commission concluded that increasing the minimum wage would improve the relative living standards of those employees who are reliant on the national minimum wage, lifting the lowest-paid out of poverty
  • However, they did acknowledge that the increase would not lift all-award reliant employees out of poverty, especially those households that have dependent children and a single-wage earners

Tips for Employers

Our Matthews Folbigg Workplace Solutions employment law team recommends employers:

  • review these employment law changes
  • seek the assistance of an employment lawyer to understand the impacts of this Fair Work Commission decision
  • ensure employment contracts and employment law policies comply with relevant employment laws, Fair Work Commission decisions, common law employment law principles and contractual obligations
  • update employment contracts in response to this employment law change
  • raise any employment law questions with an employment lawyer
  • damages can apply for breaches of employment laws including Awards and enterprise agreements (which an employment lawyer can advise on)

More Information

Please call the leading employment lawyers in Parramatta, the Matthews Folbigg Workplace Solutions employment law team on 9635-7966 to speak with one of our employment lawyers. [...]  READ MORE →

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Employment Law – New Financial Year Changes

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 [...]  READ MORE →