Fair Work Australia's minimum wage panel has increased
federal award minimum weekly wages by A$17.10 a week to A$606.40.
This increase, from the current minimum rate of A$589.30 a week,
will commence from the first full pay period on or after 1 July
The federal minimum hourly rate will increase by A$0.45 to
A$15.96 an hour from the first full pay period on or after 1 July
The decision, which was delivered on Friday 1 June 2012, is
based on a 2.9% increase in minimum award wages. This follows a
3.4% increase in minimum award wages last year. Fair Work Australia
President Justice Iain Ross said, in describing the 2.9% increase
as "moderate", that it will "improve the real value
of award wages and assist the living standards of the low
Increases will also apply to minimum wage rates for employees
with disability, junior employees and to employees to whom training
Employees with a disability
In addition to the minimum wage increases for award employees,
the national minimum wage order will:
increase the minimum wage for award/agreement free employees
with disability whose productivity is not affected to A$606.40 per
week or A$15.96 per hour based on a 38 hour week
enable the minimum wage for award/agreement free employees with
disability whose productivity is affected to be assessed under the
supported wage system, subject to a minimum payment fixed under the
Supported Wage Scheme Schedule.
The 2.9% increase will apply to junior employees' wages
under modern awards.
The national minimum wage for award/agreement free junior
employees will be calculated based on the junior wage percentage
scale in the Miscellaneous Award 2010.
The 2.9% increase will apply to wages for trainees set out in
the National Training Wage Schedule which is attached to most
For award/agreement free employees to whom training arrangements
apply, the apprentice provisions in the Miscellaneous Award
2010 will apply.
Adult apprentices should not receive less than the national
The casual loading under modern awards will be maintained at
25%. A casual loading of 23% will apply for award/agreement free
Transitional instruments (including Division 2B State
From the first full pay period on or after 1 July 2012, wage
rates in transitional instruments, including Division 2B State
enterprise awards, will increase by 2.9% per week, with
corresponding increases in hourly rates based on a 38 hour
Wage rates in Division 2B State awards relating to Queensland
trainees, apprentices and employees subject to specific Queensland
labour market programs will be varied to achieve parity with
minimum wages in the corresponding transitional Australian Pay and
Classification Scales and State reference transitional awards.
Impact for employers
The minimum wage increases will commence from the first full pay
period on or after 1 July 2012 – less than one month
away. Employers should contact payroll service providers and
payroll personnel now to provide instructions to review the rates
of pay that apply to employees and ensure that the increased
minimum rates are introduced on time.
Where above award rates are currently being paid, employers must
determine whether these rates will absorb the increase. If not, the
wage rates must be increased to meet the new minimum standards.
For some employers, the transitional provisions which continue
to run until 2014 will lead to a change in percentage pay rates on
1 July 2012. Where a transitional instrument is in place, employers
must consider both the increased pay rates announced by Fair Work
Australia and the change in percentage pay rates.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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