Australian Annual Wage Review 2024 Minimum Wages Increase by +3.75%

Overview:

Minimum wage rises 3.75% to $24.10 an hour, giving a boost to Australians as the cost of living continues to rise. These increases will take effect from the first full pay period, commencing on or after 1 July 2024.

The Fair Work Commission (‘FWC’) has handed down its much anticipated Annual Wage Review Decision.

The FWC said, “In determining this level of increase, a primary consideration has been the cost-of-living pressures that modern-award-reliant employees, particularly those who are low paid and live in low-income households, continue to experience notwithstanding that inflation is considerably lower than it was at the time of last year’s review.” “We have also taken into account that modern-award-reliant employees will shortly receive the benefit of the stage 3 tax cuts and the budget cost-of-living measures, which are projected to increase real household disposable incomes over the next 12 months.”

The Australian Council of Trade Unions (ACTU) had argued for a 5% increase to the minimum wage, whereas the federal government had supported an increase in line with inflation. Business groups had sought a more modest increase, with the Australian Commerce of Chamber and Industry (ACCI) suggesting an increase no greater than 2 per cent, while the Australian Industry Group (Ai Group) had proposed a 2.8 per cent increase.

However, the FWC has decided to increase the national minimum wage and all award rates by 3.75%, bringing the national minimum wage to $24.10 per hour or $915.91 per week based on a full-time, 38-hour working week.

For employees who are paid on award or the national minimum wage, employers must ensure that these employees are given the appropriate pay increase from 1 July 2024.

Employers who pay their employees according to an enterprise agreement, should assess the rates specified in this instrument to guarantee compliance with the minimum wage rates.

Employers who pay their employees greater than the minimum award rates and implement set-off clauses or annualised wage arrangements, must review and evaluate the implications of the minimum wage hikes. Specifically, employers should determine whether such increases can be absorbed under these arrangements, or if adjustments to remuneration arrangements are required.

While evaluating the effects of the minimum wage increase and conducting a comprehensive review of remuneration arrangements, employers should also consider the upcoming increase in the superannuation guarantee percentage, set to rise to 11.5% from 1 July 2024.

Cecilia White, HR Consulting Director of Perks People Solutions, encourages all employers to note these increases and states that, “it’s important for business owners to be aware of which group their award or minimum wage employees fall into and to keep a close eye on their payroll over coming months to ensure they aren’t caught out by these changes.”

“Most business owners are honest – the last thing they want is to underpay their employees and the penalties for non-compliance are severe,” she says.

If you have any questions regarding employment and HR or would like to conduct a remuneration audit in your business, contact Cecilia White and the team at Perks People Solutions.

Cecilia White( Director, HR Consulting )

With a background in legal practice, Cecilia has developed strong technical expertise in all matters relating to workplace law, including awards, contracts, disciplinary matters, investigations, equal opportunity and HR policy development. Her legal background is combined with her expertise across all areas of HR management and strategy, as well as significant experience in delivering workplace training.

Cecilia is also an experienced and nationally accredited mediator, specialising in workplace mediation.

With a proven ability to provide advice that is both technically sound and commercially pragmatic, Cecilia’s focus is to develop strong partnerships with clients and work with them to manage risk and liability, ensure compliance, optimise performance and achieve positive outcomes for their organisation, however large or small. She strongly believes that prevention is better than the cure and that strong policies and contracts, early intervention and excellent communication are critical to ensuring effective people management.