The Fair Work Commission has today handed down its Annual Wage Review Decision under the Fair Work Act 2009 (Cth)1. The national minimum wage and award minimum rates of pay will be increased by 4.75%.
Increases to Modern Awards
The Commission has adopted a percentage increase of 4.75% to award minimum rates of pay, effective from 1 July 20262.
This increase is subject to a structural adjustment affecting the lowest-paid classifications – those paid at the C13 and C14 wage rates. The Commission has decided to phase out the C13 classification over three stages, with the first stage taking effect as part of this review. The C14 rate will be increased by the same percentage amount as the C13 rate to maintain its current relativity to C13.3
As a result:
- The lowest wage rate for ongoing employment will be $26.44 per hour or $1,004.90 per week; and
- The lowest wage rate for entry-level employment (no more than six months) will be $25.74 per hour or $978.10 per week.
Draft determinations giving effect to the increase in modern award minimum wage rates will be made available shortly, with final determinations to be made as soon as practicable.4 Employers should monitor the Fair Work Commission’s website for these determinations when they are published.
National Minimum Wage
The national minimum wage will be increased to $26.44 per hour, or $1,004.90 per week.5
The national minimum wage order also contains specific provisions for award/agreement free employees:
- with a disability;
- who are junior employees; or
- apprentices and employees to whom training arrangements apply.6
The casual loading has been maintained at 25% for award/agreement free employees.7
Effects of Decision
These changes affect the minimum rates only. 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 deciding to absorb the increase.
The increase may also affect employers covered by enterprise agreements if they are expressly linked to an Award rate or Fair Work Commission increases, or where the minimum base rate of pay in the agreement falls below the equivalent minimum base rate in the Award. It is crucial for employers to check their enterprise agreement minimum rates of pay.
Require further information/assistance?
If have specific questions or require advice on this topic, please contact us.
This EMA Note is not comprehensive advice about your situation and does not cover all your obligations. If you require further information or advice, please contact your Consultant.
