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Urgent Employment Update - Minimum wage panel hands down 2.6% minimum wage increase

Written on the 4 June 2013 by Lynne Brook, Brook Personnel - Article compliments of Aitken Legal

From 1 July 2013, the modern award minimum wages will be increased by 2.6%. Applied to the current national minimum wage, this decision will mean a $15.80 increase to the weekly minimum wage from $606.40 to $622.20, and a $0.41 increase to the minimum hourly rate from $15.96 to $16.37.

For the third year in a row, the Fair Work Commission’s Minimum Wage Panel referenced the increase by way of percentage rather than a set dollar amount. As per recent decisions, the increase is to take affect from the first full pay period after 1 July 2013. The Panel also increased the casual loading for award free employees from 23% to 24%. The current casual loading in the modern awards (currently 25%) is to be maintained. Noting that this year’s increase is some 0.3% lower than the 2011-12 decision, the Panel cited a projected reduction, albeit slight, in GDP growth; a projected increase in unemployment; and the impending 0.25% in the Superannuation Guarantee rate as contributing factors to the Panel deciding on lower increase in 2013. 

It is interesting to note that they also considered the effect of the carbon price on published CPI figures in their determination. In the relatively straight forward decision, President of the Minimum Wage Panel, Justice Iain Ross, made the comment that the evidence laid before the panel “indicates that the earnings of award-reliant workers have been falling behind the earnings of the rest of the workforce.”

This, the Panel said, was another key consideration in assessing typical living standards which are used to gauge the extent of increase required, if any. Implications for employers should ensure that the increase is passed on to their Award employees from 1 July 2013.

It is essential that employers review pay rates for employees currently receiving over-Award payments, or engaged under enterprise agreements, to ensure that they do not underpay their employees when compared against the
revised award rates. It is also essential employersreview non-Award covered casual employees for the increased casual loading to 24%. In most cases an ‘all-up’ rate will be paid currently but the new minimum hourly rate should also be calculated with the new loading to ensure ‘allup’ rates remain at or ahead of this calculation. Remember for Award covered employees the casual loading of 25% remains.

Mark Bunch is a Partner of Aitken Legal, a law firm specialising in employment law for employers. The information in this column is intended as a guide only.  Liability limited by a scheme approved under professional standards legislation.


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Author: Lynne Brook, Brook Personnel - Article compliments of Aitken Legal