The FWC increases minimum wage rates

June, 2013

The Minimum Wage Panel of the Fair Work Commission (Panel) has decided in its annual wage review to increase the minimum wage by 2.6 percent, effective 1 July 2013.

This 2.6 percent increase represents a $15.80 weekly (or $0.41 hourly) increase for full time employees.  The minimum wage will therefore be $622.20 per week or $16.37 per hour.  This 2.6 percent increase equally applies to employees covered by modern awards, enterprise agreements or transitional instruments.  Among other things, the decision also provides for a casual loading of 24 per cent for employees who are not covered by an award or enterprise agreement.

Accordingly, it is important that employers review their pay scales to ensure that remuneration at least meets the minimum wage.

The Australian Chamber of Trade Unions sought a flat $30 weekly increase, and a 4.2 percent increase to all rates above the C10 tradesperson’s rate.  This was in contrast to Australian Industry Group’s support for a 1.75 percent increase, and the Australian Chamber of Commerce and Industry’s support for a $5.80 weekly increase.

The Panel declined to vary increases to the minimum wage depending on industry.  Instead, the Panel considered the Australian economy as a whole in coming to its decision.  However, the decision did take into account the proposed increases to the superannuation guarantee, which resulted in a reduced minimum wage increase.  This will have a negative impact on workers if the Coalition is elected and its current policy to freeze the rollout of superannuation guarantee increases is legislated.  Other factors that the Panel took into account in deciding on a lower increase than that awarded for the 2012 to 2013 Financial Year included the effect of the carbon tax on easing inflation and softening employment figures.

Contact Mills Oakley

For more information, please contact:

Ross Levin | Partner
Melbourne
T: +61 3 9605 0070
E: rlevin@millsoakley.com.au

Malcolm Davis | Partner
Sydney
T: +61 2 8035 7932
E: mdavis@millsoakley.com.au

Adam Lunn | Partner
Melbourne
T: +61 3 9605 0868
E: alunn@millsoakley.com.au

Lisa Anaf | Partner
Melbourne
T: +61 3 9605 0857
E: lanaf@millsoakley.com.au

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