On the 15th June 2022, the Fair Work Commission (FWC) released its National Wage Case decision which increased both the national minimum hourly rate and rates contained in Modern Awards.
National minimum hourly rate increase
The national minimum wage has been increased by 5.2%, which means that from 1 July 2022, the minimum hourly rate for all employees who are NOT covered by an Award will be $21.38 per hour, or $812.60 per week (based on a 38 hour week). The FWC observed in its decision that this level of increase will protect the real value of the wages for the lowest-paid workers.
The increased national minimum hourly rate will apply from 1 July 2022.
Modern Award increases
In addition to the increase in the national minimum wage, the FWC also announced the increases which will apply to Modern Awards. The FWC have provided a two tier wage increase as follows:
- Any Modern Award weekly rate below $869.60 receiving will be increased by $40 per week and
- Any Modern Award weekly rate in excess of $869.60 will be increased by 4.6%
The FWC decision delivers a proportionately higher increase to low-paid employees, in doing so the FWC noted that the present economic circumstances warranted an approach which affords a greater level of support to the low paid while seeking to constrain inflationary pressures.
The increase in Award rates will be effective, for most but not all Modern Awards from 1 July 2022. However, the FWC recognised that there remains exceptional circumstances impacting on some industries and have therefore decided to delay the implementation of the Modern Awards in some industries until 1 October 2022. A copy of the Modern Awards, which for whom the rate of pay does not increase until 1 October 2022, are set out below.
What does this mean for employers?
1 July 2022
Employers must, on and from 1 July 2022, ensure:
- all of their employees who are not covered by a Modern Award are paid, at least the new minimum hourly rate.
- all employees who are covered by a Modern Award, other than those listed below, are paid in accordance with the increased rates of pay.
1 October 2022
Employers who have employees covered by the below list of Modern Awards must ensure that employees are paid in accordance with the increased rates of pay from 1 October 2022.
Impact on employers covered by Enterprise Bargaining Agreements
Generally, increases in Modern Award rates have little to no impact on employers and employees who are covered by an Enterprise Bargaining Agreement. However, the exception to this is a Statutory obligation to ensure that rates of pay in an Enterprise Bargaining Agreement do not fall below the Modern Award base rate which would apply to an employee if they were not covered by the Enterprise Bargaining Agreement. This decision, because of the magnitude of the increase, may mean that some Enterprise Bargaining Agreement rates of pay are no longer higher than the relevant Modern Award base rate of pay. The onus is on every employer to make a comparison between their Enterprise Bargaining Agreement rates of pay and the new base rate of pay in the Modern Awards from 1 July 2022 (or 1 October for the Modern Awards listed below) and to increase rates of pay if the base rate in the Modern Award is higher than the comparable Enterprise Bargaining Agreement rate of pay.
List of Modern Awards for which pay increases apply from 1 October 2022.
- Aircraft Cabin Crew Award 2020
- Airline Operations – Ground Staff Award 2020
- Air Pilots Award 2020
- Airport Employees Award 2020
- Airservices Australia Enterprise Award 2016
- Alpine Resorts Award 2020
- Hospitality Industry (General) Award 2020
- Marine Tourism and Charter Vessels Award 2020
- Registered and Licensed Clubs Award 2020
- Restaurant Industry Award 2020.
If you would like assistance in understanding your obligations under today’s decision or in ensuring you are compliant with your statutory obligations for base rates of pay, please contact your usual Mazars advisor or alternatively, our HR consulting division via the form below or on:
Author: Cheryl-Anne Laird
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