The Fair Work Commission has handed down its decision on the new national minimum wage for 1 July 2017.
Details of the new minimum wage rates are as follows.
THE INCREASE: 3.3%
The national minimum wage will increase by 3.3% from 1 July 2017, increasing wages to $694.90 per week, or $18.29 per hour, based on a 38-hour week. This is an increase of $22.20 per week.
The adult minimum wages in modern awards will be increased by 3.3% from the first full pay period commencing on or after 1 July 2017. This increase may be absorbed into existing over-award payments, as per the absorption clause in the applicable modern award.
Award/agreement free employees
The national minimum wage is the minimum wage for all employees employed in Australia, including award/agreement free employees. The 3.3% increase also applies to the national minimum wage.
In handing down the decision, Fair Work Commission President Iain Ross commented that labour productivity rose sharply in 2016 and in the last five-year period is higher than the previous five-year period. Profit growth was also strong and above the five-year averages and 10 -year averages for both total and non-mining sectors. He said the assessment of business conditions is positive and the economy has continued to grow. Unemployment has been relatively stable, although increasing slightly, and wages growth remains subdued.
In the Commission’s opinion, subdued inflation means there is little risk to the macro-inflationary environment from its decision.
President Ross also commented that the Commission may have been “overly cautious” in the past in assessing the effect of a “modest” increase to minimum wages on employment. Commissioner Ross also said the 3.3% increase “will not lead to inflationary pressure” and is “highly unlikely” to have an impact on disemployment.
WHAT YOU NEED TO DO:
- Ensure you know the industrial instrument (modern award/agreement/award-free) and classification levels of each employee. Just because you pay them above the award rate does not mean that they are not award covered.
- Apply the pay increase from the first full pay period on or after 1 July 2017 for all award-covered employees.
- If award-covered employees are paid above the award rates then you may look to apply a lower increase or absorb the increase in accordance with the applicable award clause.
For help with identifying the correct award and classifications for your employees, and the appropriate wage increase, please contact Harrison Human Resources on 1300 544 803.