With the new tax year upon us, for many businesses, workers
compensation policy periods turn-over and budgets are being
finalised. Amongst all this activity, the increase in award wages
and the national minimum wage, can be missed, which can cause
headaches for many businesses. This article highlights what
businesses need to know.
Last week the Fair Work Commission handed down its determination
in regard to its annual national minimum wage review. The
Commission awarded all national system employees (excluding state
government employees) a 3% increase on top of the minimum wage,
effective from the first pay period commencing 1 July 2014.
Currently the minimum wage for a full time employee aged 21 and
over stands at $622.20 per week or $16.37 per hour. With the
increase, the national minimum wage for a full time employee aged
21 and over will increase to $640.90 per week or $16.87 per
The increase applies to minimum entitlements only. This means
the increase will directly affect employees who pay their staff in
line with the national minimum wage (and not in excess of it). It
will also affect employees whose wage increases under
collective/enterprise agreement where the annual increase is
determined in line with the national minimum wage
If you are already paying your staff in excess of the national
minimum wage inclusive of the increase then you do not need to pass
any further increase on to employees as it will already be absorbed
into the above minimum wage payment.
Casual employees not covered by an award or agreement who rely
on the national minimum wage will also now enjoy a casual loading
of 25%. The increase to the minimum casual loading brings it into
line with that enjoyed by employees covered by modern awards. As
discussed above with regard to the minimum wage increase, most
employers will already be paying in line or above the minimum
casual loading and will therefore not have to pass on any further
increase to their employees.
It is important to take the time when the minimum wage increase
is determined each year to review your rates of pay whether
provided for in enterprise/collective agreements, industry awards,
individual flexibility agreements or contracts of employment to
ensure that your business is protected against any future liability
or penalties that may arise for the underpayment of wages.
Failure to review the minimum wage increases and if
underpayments occur, the FWC is imposing harsh penalties on any
non-compliant businesses. It is important that you comply with
increases at the beginning of each tax year and implement them into
your payment procedures.
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.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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