HR Tips & Answers

FWA DECISION ADVISES A 5.75% AWARD WAGE INCREASE EFFECTIVE 1st JULY 2023

As you know by now Fair Work Australia (FWA) has handed down their decision on the increase to both the National Minimum Wage and minimum Modern Awards Wages.

A wage increase of 5.75% will apply to all Modern Award-based employees effective from the first full pay period starting on or after 1 July 2023.

FWA has not published the new pay rates for all affected Awards as yet; we expect them to be available in the coming week(s).

This decision gives Modern Award-based employees the highest rate increase in many years and FWA notes that it has been influenced by Australia’s current inflationary conditions.

In order to ensure your business complies with the new changes over the next 4 weeks you should start by doing the following:

  • Check what Award(s) apply to all your employees
  • Check to see if the FWA Pay Guide(s) that apply to your Awards have been updated and published

 

If your business has an employee or employees on an above Award pay rate you should also:

  • Check what the new minimum rate is for the Award that underpins the employee’s contract/pay rate
  • Check whether the 5.75% increase can be absorbed into the employee’s current above Award pay rate.
    • If no:
      • The employee(s) may also be entitled to a pay increase.
      • Ensure you keep a record of what increase the employee is entitled to and how you calculated the increase amount
    • If yes:
      • Ensure you keep a record of how the increase has been absorbed into the employee’s current above Award pay rate.

 

As previously mentioned the National Minimum Wage (NMW) has also been increased.  The NMW has been traditionally linked to Award Classification C14; FWA determined that this reference point is no longer appropriate and has now changed the NMW reference point to Award Classification C13.  The increase from $21.38 per hour to $23.23 per hour is an effective increase of 8.65% to assist society’s lowest paid workers.

A summary of the FWA decision can be viewed via the following link: FWA

As we see increasing numbers of non-compliance prosecutions, it is more important than ever that businesses keep up with their obligations in the industrial relations space while at the same time as managing the current challenging economic environment.  Be mindful – even minor mistakes may be costly!

As always WorkBetter will keep updating as more information is released by Fair Work but in the meantime if you have any questions or need assistance with your processes please don’t hesitate to contact Leisa and the WorkBetter team on 02 6009 1000.

Published: Friday, June 16th, 2023
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