National Minimum Wages to increase

On 3 June 2011, Fair Work Australia (FWA) handed down its second Annual Wage Review.

In making its decision, FWA noted that recent economic pressures and natural disasters have not reduced Australia’s strong financial performance over the past year. Accordingly, FWA determined to raise the National Minimum Wage for the 2011-2012 financial year.

The National Minimum Wage for award/agreement free employees will rise to $589.30 per week for a full-time employee, or $15.51 per hour based on a 38-hour week. This equates to an increase of $19.40 per week or 51 cents per hour.

Award/agreement free casual employees must also receive a casual loading of at least 22%.

For employees covered by a Modern Award, minimum weekly wages will increase by 3.4%. Employers must increase hourly rates proportionately, as based on a 38-hour week. This increase applies to the minimum wages for full-time, junior, disabled and piece rate employees, or those on training arrangements.

Minimum wages contained in transitional instruments will also increase by 3.4% per week.

FWA’s decision also results in a corresponding increase to payments under the Government-funded paid parental leave scheme.

All changes come into effect from the first full pay period after 1 July 2011.

Implications for Employers

In anticipation of the first full pay period in July 2011, employers must adjust any necessary payroll functions to ensure that employees are paid wages that are, at least, equal to the new National Minimum Wage, or equal to the appropriate Modern Award minimum wage.

An employer that fails to pay an employee correctly will be in breach of its statutory obligations under the Fair Work Act 2009 (Cth) and may face monetary penalties and orders of back-pay.

Please contact Sathish Dasan for more specific advice about FWA’s decision on your services.  Sathish can be contacted by telephoning 8210 1253, or by email at sdasan@normans.com.au.

If you find the information in this article useful, please feel free to forward it to someone at your workplace.

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