The Fair Work Commission has today announced that the minimum wage will increase by 5.2% to $812.60 per week (or $21.38 per hour) from 1 July 2022. Increases to rates under the federal Awards will be 4.6 percent for wages above $869.60 per week and $40 per week for those below that figure. Although most increases will occur on 1 July 2022, for the aviation, tourism, and hospitality industries, this increase will be delayed until 1 October 2022.
The Western Australian Industrial Relations Commission will also shortly announce the minimum wage will increases for State system employers (sole traders, partnerships, and some trust and incorporated associations) to take effect from 1 July 2022. Keep an eye out here.
The new rates apply from the first pay cycle on or after 1 July 2022.
It is important that all employers take the opportunity to:
- Check which Awards (if any) apply to their employees;work out into which classification each employee falls;
- Confirm that all employees' hourly rates exceed the minimum wage (including any casual loading, penalties, and overtime rates);
- Update any employment contracts or individual flexibility arrangements.
A failure to comply with the Fair Work Act 2009 (WA), including by underpaying an employee or otherwise breaching a modern Award, can result in penalties for both an employer and directors or other officers. From 1 July 2022, these penalties may also be increased. This can also be a useful time to review employment contracts across your team, ensure your payroll software is suitable for your requirements, and update your employee records before the end of the financial year.
From 1 July 2022, the high-income threshold is likely to also be increased. This figure is relevant for:
- Determining eligibility to make an unfair dismissal claim. A claim may only be made if an employee's salary is less than this amount or that employee is covered by a Modern Award.
- Determining whether a Modern Award applies to an employee. If an employee's salary is the subject of an annual guarantee of earnings above the high-income threshold, then terms of any
- Award that covers that employee and otherwise would apply does not apply.
- Determining the maximum compensation for an unfair dismissal claim. If successful in an unfair dismissal claim, an employee may receive a maximum of 26 weeks of their usual salary, or 50% of the high-income threshold amount, whichever is lower.
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.