Key changes to employment conditions commencing 1 July 2025 - What employers need to know.
Employers should be aware of the following key changes to employment conditions commencing 1 July 2025.
Increased minimum wage rates
The minimum rates of pay have been increased by 3.5% for all national system employees covered by a Modern Award. The same increase has also been applied to the National Minimum Wage (NMW).
From the first full pay period on or after 1 July 2025, the NMW will increase from $24.10 per hour to $24.95 per hour. This equates to a rise in the weekly minimum wage increase from $915.90 per week to $948.00 per week for national system employees.
Employers must ensure that this increase is applied to all employees who are paid at the minimum rates specified in a Modern Award or employees who are paid in accordance with the NMW.
Increase in the statutory minimum superannuation guarantee rate
The minimum superannuation guarantee rate for both national system employees and state system employees is also set to increase from 11.5% to 12% from 1 July 2025.
Employers are legally obliged to ensure that all employees are receiving superannuation guarantee contributions at or above this rate. Failure to do so may result in the employer being liable for the superannuation guarantee charge.
Increase to the high-income threshold
From 1 July 2025, the high-income threshold for claims initiated under the Fair Work Act 2009 (Cth), including an unfair dismissal claim, will increase from $175,000 to $183,100.
The maximum compensation limit that can be awarded for unfair dismissal claims will also rise to $91,550 for dismissals which occur on or after 1 July 2025.
Expansion of the Paid Parental Leave scheme
From 1 July 2025, the federal government’s Paid Parental Leave scheme will be expanded. Both national system employees and state system employees who are parents of children born or adopted on or after 1 July 2025 will be entitled to 24 weeks of paid parental leave (which is paid at the NMW), an increase from the current entitlement of 22 weeks.
Additionally, for births or adoptions which occur after 1 July 2025, parents will receive the ‘Paid Parental Leave Superannuation Contribution’. Under this initiative, a 12% superannuation contribution will be paid by the federal government on top of parental leave payments. The superannuation contribution will be made at the end of each financial year in which parental leave payments were received.
Other changes commencing later in 2025
Right to disconnect for small businesses employers
From 26 August 2025, employees of national system employers that are classified as ‘small businesses employers’ (i.e., employers with less than 15 employees) will also have a legally recognised ‘right to disconnect’.
For further information on the ‘right to disconnect’ please refer to our earlier article, which can be accessed on the following link: [https://www.normans.com.au/new...].
Casual conversion rights for employees of small business employers
Casual employees engaged by a national system employer that is a small business employer will be entitled to initiate a request for casual conversion to permanent employment under the ‘employee choice pathway’ from 26 August 2025.
Under these new rules, eligible casual employees may notify their employers in writing of their intention to convert into permanent (full-time or part-time) employment.
Upon receiving a written request, the employer must respond to the request within 21 days, either accepting or refusing the conversion. Reasons for not accepting the change must be based on reasonable grounds as specified in Division 4A of the Fair Work Act 2009 (Cth).
For more specific information or advice on any of the material contained in this article please contact Sathish Dasan on +61 8 8210 1253 or sdasan@normans.com.au or Christian Beltrame on +61 8 8217 1315 or cbeltrame@normans.com.au.
