2.5% Wage Increase Announced

The Fair Work Commission (FWC) has announced a 2.5% increase to minimum wages following its 2020-2021 annual wage review (Decision).

Commencement Date

The commencement of the increase will depend on which group the applicable award falls under and will apply from the first full pay period starting on or after:

• Group 1 – 1 July 2021;
• Group 2 – 1 September 2021; or
• Group 3 – 1 November 2021.

Most awards fall into Group 1 and will increase from 1 July including the Vehicle Repair, Services and Retail Award (Vehicle Award) and Clerks Private Sector Award.

Group 2 includes the General Retail Industry Award 2020 and for Group 3 includes awards where exceptional circumstances justified delayed operative dates.

Vehicle Award

Regarding the operative date for the Vehicle Award, it was stated in the Decision:

We acknowledge that an operative date of 1 July 2021 will mean that businesses covered by the Vehicle Repair, Services and Retail Award 2020 will face two minimum wage increases in a 6 month period. But those businesses also had the benefit of no increase in minimum wages between 1 July 2020 and 1 February 2021. Further, the timing issues is, of itself, not sufficient to warrant a finding of exceptional circumstances in light of the turnover data.

Award Employees

Employer Assist will provide members with access to updated pay guides once the FWC publishes the variation determinations. The Fair Work Ombudsman will also release updated pay guides in due course.

If you are already paying your employees more than the minimum award rate, you may be able to absorb the increase depending on the particular employment arrangements.

HVIA members can contact Employer Assist for specific advice on whether absorbing an increase is possible based on individual circumstances.

Enterprise Agreements

If a registered agreement applies to the workplace, you will need to ensure the minimum base rates in the agreement remain at least equal to the base award rates.

If not, the agreement rates will need to be increased to at least match the base award rates.

Award Free Employees

The national minimum wage applies to employees who aren’t covered by an award or registered agreement.

The new national minimum wage that will apply from the first full pay period starting on or after 1 July 2021 will be $772.60 per week or $20.33 per hour.

This constitutes an increase of $18.80 per week to the weekly rate or 49 cents per hour to the hourly rate.

Superannuation

Also note, the Superannuation Guarantee (SG) rate is set to increase to 10% on 1 July 2021.

Next Steps

Members should keep an eye out for updated pay guides. In the meantime, you can start reviewing your current wage arrangements to determine whether the increase can be absorbed or if you need to budget for the increase.

Now is a good opportunity to review existing employment contracts or if there are no existing employment contracts, implement new employment contracts.

Employer Assist can review existing employment contracts and provide members with advice on any amendments required or improvements that can be made.

Employer Assist can also provide members with template employment contracts tailored to suit any individual requirements.

Employer Assist

If you require assistance, contact Employer Assist on 07 3556 4206 or hvia@employerassist.com.au.

This article is intended for information purposes only and should not be regarded as legal advice. Please contact Employer Assist for advice.