MINIMUM WAGE TO INCREASE
|Fair Work Australia, the country’s industrial umpire, last week handed down its decision to apply a 2.9% increase in wages for employees covered by a Modern Award. The increase, to come into effect from July 1, will apply across the board to all classifications in Modern Awards. |
Non-award employees were also granted an increase to the minimum wage of $17.10 per week, or $0.45 per hour. This will mean that from July 1, workers on the minimum wage will receive $606.40 a week, up from $589.30.
Background to the Decision
FWA president Justice Iain Ross said various considerations favoured a moderate wage increase that would "improve the real value of award wages and assist the living standards of the low-paid".
Justice Ross said the Panel decided against a bigger pay increase to compensate for the expected price effects associated with the federal government's carbon tax.
"We conclude that we should not provide any additional assistance to compensate for the anticipated price effects associated with the introduction of a price on carbon," he said.
"Compensation has already been provided through tax cuts and transfer payments and further compensation by minimum wage adjustments would amount to double-dipping."
The increase was less than the $26-a-week pay rise sought by the ACTU but above the $9.40-a-week increase that had been proposed by the Australian Chamber of Commerce and Industry (ACCI).
Transitional Award Arrangements
Until 1 July 2014 many businesses will continue to have transitional wage arrangements which apply to employees, so when reviewing today's increase these arrangements will still need to be considered. If you are not sure whether transitional rates apply to your business, please contact us.
Casual Loading Changes
FWA also announced that for those casual employees not covered by an Award, the casual loading has been increased from 22% to 23% from July 1. The casual loading for employees covered by Modern Awards has been maintained at 25%.
If you would like further information, please contact your Boyce Accountant.
Source information: AAP, M+K Lawyers, Fair Work Australia