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The Fair Work Commission (“FWC”) has today handed down its Annual Wage Review Decision under the Fair Work Act 2009 (Cth) (“Act”).1 The National Minimum Wage and Award wages will be increased by 3.5%, effective from the first full pay period on or after 1 July 2018.

Increases to Modern Awards and Transitional Instruments

The FWC has adopted a uniform percentage increase of 3.5%. 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 new weekly (rounded) rate and divide by 38, unless the particular Award specifies another method.
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National Minimum Wage

The national minimum wage will be increased to $18.93 per hour, or $719.20 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%.
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Effect 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 making a decision to absorb the increase.

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

If you require further information or advice, please contact one of our consultants.
1 Annual Wage Review 2017-2018 [2018] FWCFB 3500 (1 June 2018).

 

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