In brief - Fair Work Commission delivers annual wage review
On 4 June 2014, the Fair Work Commission (FWC) announced an
increase of 3% to the federal minimum wage. This equates to an
increase of $18.70 per week, taking the minimum wage from $622.20
to $640.90 per week.
The new minimum wage comes into operation on 1 July 2014.
Wage increase higher than increment sought by employers
Annual Wage Review 2013-14 decision is only 0.7% below what the
Australian Council of Trade Unions (ACTU) sought in its
submissions. The 3% increase is substantially higher than the
figures proposed by employer associations, with the Australian
Industry Group seeking a 1.6% increase.
Who is affected by the minimum wage increase?
The decision to increase the minimum wage will affect employees
in the national system who are covered by a modern award; or who
are not covered by either an award or an agreement.
What should you do as a business owner?
Business owners will need to ensure that they comply with the
new minimum wage. In order to ensure compliance, employers should
evaluate all employee relationships, including employees who are
in accordance with a Modern Award
an annualised salary
all-inclusive hourly rates
above the current minimum wage rate
in accordance with an enterprise agreement
In examining the employment relationship to ensure compliance
with the new minimum wage, employers should evaluate all facets of
the employee relationship, including work related allowances,
penalties and loadings.
Employers should also be aware that on 1 July 2014,
employers' compulsory superannuation contributions will
increase to 9.5%. Accordingly, the increase in minimum wage and
superannuation contributions will affect the amount that employers
are required to contribute to employees' superannuation
What happens if you do not comply with the minimum wage
Failure to comply with the new minimum wage from 1 July 2014 can
have significant consequences for an employer, including:
claims for underpayment of wages to the Fair Work Ombudsman,
the Federal Court or the Federal Circuit Court
Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Treasurer Scott Morrison recently announced changes to a number of 2016 Budget superannuation contribution measures.
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