What is the Australian Minimum Wage Increase 2022 and how does this Impact you?

KEY TAKE-OUTS:

• On 15 June 2022, the Fair Work Commission made a decision to increase the national minimum wage by 5.2% wage and increase award wages by 4.6%.
• A majority of modern awards will incorporate the increase from 1 July 2022.
• If you are an employee impacted by these changes, you should check the increase has been passed onto you from 1 July 2022. If you are an employer impacted by these changes, you should ensure that you are paying your staff correctly from 1 July 2022.
• Modern awards that are still adversely impacted by the pandemic will have to wait until 1 October 2022 to receive the increase.

Annually, the Fair Work Commission’s Expert Panel come together to review the current awards and minimum wages. It is their responsibility to consider provisions and objectives within the Fair Work Act.

Will there be a fair work wage increase in 2022?

On 15 June 2022, based on the research conducted by the Panel, the Fair Work Commission made the following decision:

• Minimum wage increase: A 5.2% wage increase to the national minimum wage. This means that the new national minimum wage will increase to $812.60 per week or $21.38 per hour.
• Modern award increase: A 4.6% increase to modern award wages. This means modern award wages will increase by $40 per week to the weekly rate or $1.05 per hour to the hourly rate.

Increases to the national minimum wage and modern award wages typically take effect from the first full pay period on or after 1 July 2022. The increase will apply from this date for most modern awards.

Exceptional circumstances to delay wage increase

However, similar to the previous two years, the Fair Work Commission have considered that it is necessary to activate the ‘exceptional circumstances’ clause in the Fair Work Act 2009 to delay the operative date for increases in certain industries.

There are a group of industries considered adversely impacted by the pandemic, namely the aviation, tourism, and hospitality industries. For employees covered by the following awards, the increases will take effect from the first full pay period on or after 1 October 2022:

• Aircraft Cabin Crew Award 2020
• Airline Operations – Ground Staff Award 2020
• Air Pilots Award 2020
• Airport Employees Award 2020
• Airservices Australia Enterprise Award 2016
• Alpine Resorts Award 2020
• Hospitality Industry (General) Award 2020
• Marine Tourism and Charter Vessels Award 2020
• Registered and Licenced Clubs Award 2020
• Restaurant Industry Award 2020.

What does this mean for you?

From 1 July 2022 (or 1 October 2022, depending on the industry), employers are required to satisfy the new minimum wage and relevant modern award pay rates for all relevant staff. It is also a requirement for employers to contribute at minimum 10.5% towards employee superannuation contributions.

Employers

If you are an employer, you should ensure that you are paying your staff correctly once the changes come into effect. Experts believe that although the increase in minimum wage may put an additional burden on employers struggling to deal with inflationary pressures, a majority of employers are already paying well above the minimum wages to attract and retain staff.

It is important for Employers to carefully review their wage arrangements and implement the necessary modern award wage increases and minimum wage requirements are met. If you are an Employer and require assistance with making sure you are paying your staff correctly, the Employment Law Team at Coutts can assist you.

Employees

If you are an employee impacted by these changes, you should review your pay after the changes come into effect for your industry to make sure that the minimum wage and modern award wage increases have been passed on to you.

If you are an Employee and believe you are being underpaid or that the relevant increases are not made to your wages once the changes are in effect, the Employment Law Team at Coutts can assist you.

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