Increases in employee minimum wage and superannuation entitlements from 1 July 2023 – what these changes mean for employers
Employers should be aware of several increases to employee minimum entitlements that have come into effect from 1 July 2023. These changes include increases to modern award minimum rates of pay, the National Minimum Wage (NMW), and the superannuation guarantee rate (SG rate).
The Fair Work Commission (FWC) has recently delivered its decision in the Annual Wage Review 2022-23 (the Decision). As part of the Decision, the FWC has increased award minimum rates of pay by 5.75%. This increase will apply from the first full pay period on or after 1 July 2023, and applies to all Australian employees who are paid at the rates specified in a modern award.
The Decision has also resulted in an increase to the NMW by 5.75%. From the first full pay period on or after 1 July 2023, the NMW will increase from $21.38 per hour to $23.23 per hour. This corresponds with a weekly minimum wage increase from $812.60 per week to $882.80 per week. This increase must be paid to all employees who receive the NMW.
As many readers will be aware, the Superannuation Guarantee (Administration) Act 1992 (Cth) (SG Act) schedules a 0.5% increase to the SG rate every year until it reaches 12% on 1 July 2025. Accordingly, from 1 July 2023, the SG rate has been increased from 10.5% to 11% for the 2023-24 income year.
This alert serves as a timely reminder to employers to ensure that employees are paid in accordance with their applicable minimum entitlements from the first full pay period on or after 1 July 2023. Any employees covered by a modern award, or employees receiving the NMW must be paid at their new applicable minimum rates. Employers must make superannuation contribution payments at 11% for all employees.
Employers should be aware that a failure to pay at least the applicable minimum wage can attract orders for compensation, as well as additional monetary penalties for employers. A shortfall in superannuation guarantee payments will attract the superannuation guarantee charge, and can attract additional penalties.
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