On 30 May 2019, the Fair Work Commission (FWC) handed down its decision in the Annual Wage Review for 2018-19. The decision will increase the national minimum wage and the modern award minimum wages by 3 per cent from the first full pay period on or after 1 July 2019. The decision affects close to 2.2 million or 21 per cent of Australian employees who have their pay set by a modern award and 180,220 or 1.7 per cent of employees who are paid at the adult minimum wage rate.
The key changes from the Annual Wage Review are as follows:
The minimum wage percentage increase falls short of last year’s increase of 3.5 per cent. The FWC stated their decision to present a lower wage rate increase than last year was due to the current economic environment, especially the recent fall in GDP growth, the drop in inflation and the tax-transfer changes which took effect in the review period which have provided a benefit to low-paid households.
The increased modern award minimum wage will have a flow on effect to loadings, penalties, allowances and overtime payments under the modern awards that are calculated with reference to the modern award minimum wages.
In the coming weeks, the FWC will hand down further determinations setting out the new modern award minimum rates of pay (based on the 3 per cent increase) for each of the modern awards.
Employers should review their current pay arrangements to ensure that:
The FWC’s full decision is accessible here.
Authors: Michael Selinger, Natasha Jones & Declan Johnston
Michael Selinger, Partner
T: +61 2 8083 0430
Stephen Trew, Managing Partner, Sydney
T: +61 2 8083 0439
Charles Power, Partner
T: +61 3 9321 9942
Benjamin Marshall, Partner
T: +61 3 9321 9864
Rachel Drew, Partner
T: +61 7 3135 0617
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