3% increase to the minimum wage from 1 July 2019

By Lisa Anaf, Partner and Sarah Saliba, Lawyer

The Fair Work Commission has delivered its decision with respect to the 2018/2019 annual wage review.

Following its review, the Commission has decided to increase minimum rates from the first full pay period on or after 1 July 2019 as follows:

  • the national minimum wage will increase by 3% to $740.80 per week or $19.49 per hour, resulting in an increase of $21.60 per week or 57 cents an hour; and
  • modern award minimum wages will also increase by 3% (with weekly wages rounded to the nearest 10 cents); and
  • the C10 rate in the Manufacturing and Associated Industries and Occupations Award 2010 will increase by $25.10 to $862.70 per week.

This is compared to the 3.5% minimum wage increase awarded last year.

The Commission has rejected the ACTU’s push for a “living wage”.

Instead the Statement confirms that it had “decided to award a lower increase this year than that awarded last year having regard to the changes in the economic environment (in particular the recent fall in GDP growth and the drop in inflation) and the tax-transfer changes which have taken effect in the current Review period and which have provided a benefit to low-paid households”.

Minimum wage obligations – are you ready for 1 July?

Following the Commission’s decision, employers must review their rates of pay to ensure that employees are at all times being paid no less than the minimum wage.  Harsh penalties of up to $126,000 apply to employers who fail to meet their minimum wage obligations.

For employees paid in accordance with minimum wages in modern awards (or the national minimum wage), this means you must ensure that payroll systems are ready to pass on the increased wages from the first full pay period on or after 1 July 2019.

Employers with enterprise agreements will need to also ensure that the base rate of pay payable to employees under the enterprise agreement does not fall below the applicable base rate of pay under the relevant modern award (or the national minimum wage, if applicable).

For employees on annualised salaries, employers will need to consider whether that salary is still sufficient to cover the employees’ minimum entitlements taking into account the increased national minimum wage (or their respective modern award wage).

If you require any assistance in reviewing your staff rates of pay to ensure that your business remains compliant at law, please contact Lisa Anaf on (03) 9605 0933.

For further information, please do not hesitate to contact us.

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