From 1 July 2022, the minimum hourly wage for Australian workers has been raised from $20.33 to $21.38 by the Fair Work Commission in a landmark decision.
The decision sets the pay of at least 2.7 million Australians on the national minimum or awards. In fact, the proportion of all Australian employees dependent on the minimum wage and awards for pay rises is growing: from 15% to 21% since 2010. Women also depend disproportionately on this decision – they comprise 61% of all award-dependent workers.
This increase of 5.2% to the national minimum wage and 4.6% for award minimums could impact your current payroll amidst increasing inflation. Being better informed and preparing your business may require additional steps to be taken to maintain your compliance.
How Was The Minimum Wage Set?
Every year the Fair Work Commission holds the annual wage review, receiving submissions from unions, employers, governments and other stakeholders.
On the 15th of June, 2022, the commission’s minimum wage panel ordered an increase in the national minimum wage and the safety net in industrial awards, a decision that more than 2 million workers rely on to set their wage. This has been in effect since 1st July 2022.
The Fair Work Commission ordered modern award minimum rates to go up 4.6% “subject to a minimum increase of $40 per week”, meaning that employees on awards earning above $870 per week will receive a 4.6% increase while those below that level will get $40 more per week.
However, the commission also ruled the increase be delayed until the 1st of October in the aviation, tourism and hospitality sectors due to “exceptional circumstances” including their slower recovery from the Covid recession. These industries include:
- 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 are in one of the aforementioned industries or have concerns about how this decision will impact your business currently, you can speak with a trusted business advisor to better plan for your business’s future compliance with regard to your employees.