The Fair Work Commission (FWC) announced today, 30 May 2019, a 3% increase to minimum wages. The increase will apply from the first full pay period starting on or after 1 July 2019.
The new national minimum wage will be $740.80 per week or $19.49 per hour, and constitutes an increase of $21.60 per week.
The 3% increase only applies to employees whose pay rates are derived from the national minimum wage, a modern award or in some cases a registered agreement.
The Panel's decision cited the following factors in justifying the increase:
- Improving health in the general economy and labour markets, evidenced by strong employment growth;
- Real growth in GDP;
- No evidence of adverse effects of the previous 2 years real wage increases.
The Commissioner stated that the Panel's decision would “not lead to undue inflationary pressure and is highly unlikely to have any measurable negative impact on employment”.
In the lead up to the decision, The Australian Council of Trade Unions (ACTU) had argued that the minimum wage should rise by $43 a week, or 6%, to $762.20. However, The Australian Chamber of Commerce and Industry recommended the increase not exceed 1.8 per cent, while the Australian Industry Group argued for a 2 per cent, or $14.40 a week increase.
What must you do now?
Determinations and orders about how this decision affects each Modern Award will be made shortly by the Commission and is likely to be available from mid June 2019.
Employers paying at award rates should start reviewing salaries and prepare to implement any relevant increases. If you pay above award wages you will still need to check compliance with minimum rates and allowances.
Contact us if you need assistance in reviewing your pay rates and penalty rates. Stay tuned for further updates on Awards, allowances and thresholds as we approach the end of this financial year.