The Fair Work Commission has announced the rate that minimum wages will increase by, from the first full pay period on or after 1 July 2023.

The Fair Work Commission decided that minimum wage rates for employees covered by modern awards will increase by 5.75%.

“Award-free” employees are subject to the national minimum wage which will, for full-time employees, rise from $21.38 per hour or $812.60 per week to $23.23 per hour or $882.80 per week (in effect an 8.6% increase). Casual employees will be entitled to a 25% loading on these amounts.

 

What about employees covered by enterprise agreements?

The increases to modern award rates will impact employers covered by enterprise agreements as the law operates so that employers cannot pay a base rate of pay that is lower than the applicable base rate of pay in a modern award. Professional advice should be sought on exactly how this will operate in your business.

 

Do I need to increase pay rates if I already pay above the minimum wage?

Generally speaking, where employers are already paying rates that are higher than the relevant minimum wage, they will not need to increase their rates of pay, unless the new minimum wages overtake the rates that are currently being paid.

 

What about employees covered by enterprise agreements?

The increases to modern award rates will impact employers covered by enterprise agreements as the law operates so that employers cannot pay a base rate of pay that is lower than the applicable base rate of pay in a modern award. Professional advice should be sought on exactly how this will operate in your business.

 

What other changes do I need to be aware of?

All employers will be affected by the 0.5% increase to minimum superannuation rates which also takes effect from 1 July 2023 (increasing the rate of super from 10.5% to 11%).

Employees in the aged care industry (including certain employees covered by the SCHADS Award, will also receive a 15% increase to their minimum wage, in addition to the 5.75% general increase for all award-covered employees. See our previous blog here.

 

Need further help?

If you require any further assistance with these matters, please contact us. A summary of the Fair Work Commission’s decision on the increases to minimum wages is available here

 

Disclaimer

The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact HR Connect for advice.

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