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On 31 May 2016, the Fair Work Commission (“FWC”) handed down its Annual Wage Review under the Fair Work Act 2009 (Cth) (“Act”).1   This increase is effective from the first full pay period on or after 1 July 2016

Increases to Modern Awards and Transitional Instruments

The FWC has adopted a uniform percentage increase of 2.4%. This increase will be applied to the minimum rates for each Award level. This increase will apply to all Modern Awards, and any transitional instruments that are still in operation. (If any of your employees are covered by a copied State instrument

– because of a transfer of business from a former state public sector employer – you will need specific advice about how the decision affects that instrument, as there are special provisions.)

Weekly wages in Modern Awards will be rounded to the nearest 10 cents. To obtain an hourly rate, you must use the weekly rounded rate and divide by 38.

National Minimum Wage

The national minimum wage will be increased to $17.72 per hour, or $672.70 per week. This rate has been calculated on the basis of a 38 hour week for a full-time employee. The national minimum wage order will also contain specific provisions for award/agreement free employees:

  • with a disability;
  • who are junior employees; or
  • apprentices and employees to whom training arrangements apply and a casual loading of 25%.

Effect of Decision

Most Awards allow absorption of the Award’s monetary obligations into over award payments.  If you are paying an over-award rate, you may be able to absorb the increase into any over award payments. We recommend that you seek advice before making a decision to absorb the increase.

The increase may also affect employers covered by enterprise agreements or transitional agreements that are expressly linked to an Award or where the minimum rate of pay in the agreement falls below the equivalent minimum rate in the Award. Again, we recommend that you seek advice about your obligations.

Require further information/assistance?

If you require further information or advice, please contact your local Consultant at either our Adelaide or Melbourne offices.

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