1.75% Increase to Minimum Wages

Key Points:

  • Fair Work has announced a 1.75% increase to minimum wages
  • Increases to awards will start on 3 different dates for different groups of awards
  • The new national minimum wage will be $753.80 per week or $19.84 per hour

The Fair Work Commission (FWC) has announced a 1.75% increase to minimum wages. This will apply to all award wages.  The decision, released on Friday 19th June 2020, will result in pay rises for more than 2.2 million Australians who are paid the minimum or who have their pay set by awards that rise in line with the decision.

Increases to awards will start on 3 different dates for different groups of awards however, the FWC decided to stagger the increase, with essential service workers benefiting immediately.  Frontline healthcare, social assistance, teachers and childcare workers will receive the increase from 1 July; construction, manufacturing and other industries from 1 September; accommodation, food services, arts, recreation, aviation, retail and tourism from 1 February. (For more information on when certain awards will increase, please click here for more information).

For anyone not covered by an award or an agreement, the new national minimum wage will be $753.80 per week or $19.84 per hour. This applies from the first full pay period starting on or after 1 July 2020.

Unions had asked for a 4% rise, or $30 a week more, while peak employer bodies – including the Australian Chamber of Commerce and Industry and Australian Industry Group – wanted a freeze or to delay the pay rise until 1 January, and the federal government had stressed the need to protect jobs and consider business viability.

The FWC had taken a more ‘nuanced approach’ on the timing of pay rises than employer calls to delay all rises until 2021. The staggering of pay rises was based on restrictions to contain Covid-19, and data about those sectors experiencing the biggest job losses and pay declines.

Ross said about 25% of award-reliant workers would benefit in the first tranche from 1 July, with 40% of workers benefitting in the second tranche and more than one-third of all workers in the final tranche.

The secretary of the Australian Council of Trade Unions, Sally McManus, said the increase was modest and felt is was disappointing that several awards will not see any increase until November or February.

“However, it is clear in the decision that this panel of experts recognise that cutting wages in the middle of this crisis would be a disaster for working people and the economy and they have rejected the arguments put by some employers to effectively cut wages by freezing the minimum wage,” she said.

You can read the detailed decision on the Fair Work Commission’s website.

If you have any questions or need advice and clarity specific to your business, feel free to contact Semmens & Co on 03 8320 0320 for a free consultation.

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Mark Semmens

Mark is a Chartered Accountant with a wealth of experience in accounting and taxation. Mark is a Member of Chartered Accountants Australia and New Zealand, the Tax Practitioners Board and the National Tax and Accountants Association.

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Daniela Semmens

Daniela Semmens is a Co-Director of Semmens & Co. and joined the company as General Manager in 2017. Daniela is an Affiliate Member of Chartered Accountants Australia and New Zealand and also a Member of the Australian Institute of Project Management.

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