Employment – Increased national minimum wage and modern award rates, effective 1 July

On 1 July 2015, the national minimum wage will increase by 2.5%, to $656.90 per week (or $17.29 per hour). The national minimum wage applies to Federal system employees who are covered neither by an award nor an enterprise agreement (award/agreement free employees).

Minimum wage rates set out in all modern awards will also increase by 2.5% on 1 July 2015. Many industries throughout Australia are regulated by one or more modern awards (which number over 100).

Employers should note that there are different rates for juniors, apprentices, trainees and people with disabilities, all of which will increase commensurately.

Impact for employers

Federal system employers should ensure that any award/agreement free employees, and employees who earn the minimum wage specified by an applicable modern award, are paid at least their applicable new minimum wage rate from the first full pay period on or after 1 July 2015.

Further, any contracts or enterprise agreements which (through the provision of above minimum wages) purport to ‘absorb’ some or all statutory or award-based monetary obligations should be reviewed to ensure that this indeed remains the case.

Failure to pay at least the applicable minimum wage rate can attract orders for compensation, as well as additional monetary penalties against employers.

For more specific information on any of the material contained in this article please contact Amanda Green on 08 8217 1306 or agreen@normans.com.au.