The commencement of the new financial year brings with it
important changes to minimum wages, national unfair dismissal
regulations and various tax thresholds and rates.
We have produced the following summary of the significant
changes about which employers should now be aware. Depending on
your individual circumstances, they may require immediate action to
ensure ongoing regulatory compliance.
In this Alert, Senior Associates Rosalie Cattermole and Damon
King and also Solicitor Claire Tuffield provide a brief snapshot of
a number of significant developments in this space.
Increases to minimum wage rates for national system employers
(all states and territories, except for Western Australia)
In accordance with the 2014 annual wage review decision of the
Fair Work Commission, the following changes take effect to minimum
wages from the first full pay period on, or after, 1 July 2014:
All modern award rates of pay have increased
by 3 percent, with flow-through proportionate increases to hourly
minimum wages and annual salaries.
The national minimum wage for adults working
full time (38 hours per week) increased from $622.20 to $640.90 (an
increase of $18.70 per week).
The national minimum hourly rate for permanent
national system employees increased from $16.37 to $16.87 per hour
(an increase of 50 cents per hour).
The default casual loading for award/agreement
free casual employees increased from 24 percent to 25 percent. The
minimum hourly rate for casual employees to whom a modern award
applies will continue to be subject to the modern award standard
casual 25 percent loading.
The above changes apply to all workers in the national system
including juniors, apprentices, trainees, differently-abled
employees and those paid under piecework arrangements.
A number of transitional or phasing in arrangements from state
award based rates to modern award rates of pay cease to apply from
1 July 2014 and instead, the relevant rates of pay are simply those
outlined in the applicable modern award.
Now is an ideal time for all employers to conduct an annual
review of their remuneration arrangements with their employees to
ensure ongoing compliance with minimum wage rates.
Changes to minimum wage rates for WA system employers
For those employers in Western Australia outside the national
system, effective from 1 July 2014 the minimum wage increased to
$665.90 per week (i.e. the WA minimum wage is $25.00 per week
higher than the national minimum wage).
In the WA private sector, this change affects employers who are
not incorporated, such as sole traders and partnerships of
Changes to the high income threshold and federal unfair
The high-income threshold for the purposes of the Fair Work Act
increased from 1 July 2014 to $133,000 per annum (up from
This means that employees, who are not covered by an award or
statutory workplace agreement, do not have access to the federal
unfair dismissal jurisdiction if their annual rate of earnings
exceeds $133,000 from 1 July 2014.
This change also:
means that the maximum compensation which might be awarded by
the Fair Work Commission for a successful unfair dismissal claim
has increased to $66,500 (i.e. half the new high income threshold
and up from $64,650); and
may affect the continued non-application of awards and award
entitlements to high income employees whose industrial arrangements
incorporate a guarantee of annual earnings at a level which is
intended to exceed the high-income threshold.
Key tax rate and threshold changes
The key tax rate and threshold changes are summarised in the
Employment termination payments
The ETP cap for life benefit and death benefit termination
payments has increased to $185,000 (up from $180,000 in the
2013/2014 income year)
The amount up to the ETP cap is taxed at a concessional rate
and the amount in excess of the ETP cap is taxed at the highest
Genuine redundancy payments
The new base limit is $9,514 and the amount for each completed
year of service is $4,758
This is an increase from the 2013/2014 base amount of $9,246
and $4,624 for each completed year of service
Superannuation guarantee contributions
The superannuation guarantee charge percentage is 9.5
This is an increase from the 9.25 percent that applied for the
2013/2014 income year
Maximum contribution base
The maximum contribution base is now $49,430 per quarter. An
employer is not required to provide superannuation support for its
employees for the part of earnings above this limit. Although, an
employer may have a contractual obligation to make superannuation
guarantee contributions for the total amount of an employee's
ordinary time earnings
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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