As part of the annual minimum wage review, the Fair Work Commission announced on 15 June 2022, that the national minimum wage will increase by 4.6% for employees covered by the relevant modern awards and 5.2% for minimum wage employees who don’t fall under any specific modern award.
While in previous years, the minimum wage became effective at the start of the new financial year (1 July), the Commission has opted to follow the strategy from last year to allow for a staggered introduction of the new minimum wage. This is to give organisations still suffering from the economic impact of COVID-19 sufficient time before the increase is promulgated into law.
Here’s what you need to know about the implementation dates and whether or not the increase applies to your organisation.
Important Dates to Remember for the Minimum Wage Increase Implementation
The modern awards set to implement the national minimum wage increase on 1 October 2022 include:
- Hospitality Industry (General) Award 2020
- Restaurant Industry Award 2020
- Marine Tourism and Charter Vessels Award 2020
- Aircraft Cabin Crew Award 2020
- Airport Employees' Award 2020
- Airline Operations – Ground Staff Award 2020
- Air Pilots' Award 2020
- Registered and Licensed Clubs Award 2020
- Airservices Australia Enterprise Award 2016
- Alpine Resorts Award 2020
How Does the Increase Impact Award Allowances?
So, to ensure compliance with the minimum wage increase and subsequent allowance increases, keep an eye out for changes to the pay guide of the modern award that applies to your sector.
How Does the Minimum Wage Increase Affect Enterprise Agreements?
In other words, the enterprise agreement can’t propose a minimum wage that is less than the modern award that underpins the agreement. So employers will need to ensure that they adjust the enterprise agreement to be in line with the national minimum wage changes.
For example, if Laurel is a full-time junior administrative clerk that works 38 hours per week in terms of an enterprise agreement and currently gets paid $21.62 per hour and the Clerks' Private Sector Award proposes an increase of 4.6%, her enterprise agreement must be adjusted accordingly. Therefore, Laurel should expect to get paid at least $22.61 per hour.
Superannuation Contributions are also Increasing in the New Financial Year
It’s worth taking note that, in addition to the national minimum wage increase, employers will now have to make super contributions amounting to 10.5% of their employees' wages.
With the Fair Work Commission's announcement to increase the national minimum wage, employers across Australia need to check that their employees are being paid correctly. Increased modern award rates may also apply in some cases.
If you find that any of your employees are being paid below the minimum wage, you will need to increase their pay to comply with the law. Similarly, if you already pay your employees more than the minimum wage, you are not obliged to give them a pay rise.
However, it is important to check that their allowance rates are still in line with the new minimum wage rates. By keeping on top of these changes, you can ensure that your business remains compliant with the law.
If this is all too much trouble and you'd rather automate the process like many of our clients, you can make the shift over to KeyPay cloud payroll by engaging us to help you transition from a manual to a cloud system seamlessly.
Here’s how KeyPay cloud payroll works:
- Time and Attendance
Employees clock their time using NoahFace time and attendance software that syncs all data with KeyPay's cloud payroll software.
- Live Timesheet Approval
No more manual entries or paper timesheet approvals. Supervisors and managers approve time and attendance on the go directly on KeyPay.
- Automated Modern Awards Compliance
KeyPay’s pre-built modern Awards make it easy for payroll managers to pay staff correctly, each and every pay run.
- Automated Payslips
Create and customise Fair Work compliant payslips that can be easily accessed in the KeyPay cloud.
- Payroll Complete In Under an Hour with KeyPay
Never get it wrong. No back pay calculations. No inefficient manual interpretation. No data re-entry. Stress-free paydays that take less than an hour to complete!
If you’re interested in moving from a manual payroll system to KeyPay, get in touch with us today for a free demo.