Minimum wage increase

Jun 29, 2020 Uncategorized

Over the last couple of weeks, I have been asked by many small business owners if and how the minimum wage increase affects them. The Fair Work Commission (FWC) delivered its annual wage review decision on 19 June 2020. Below is a brief insight into the considerations, determinations, and how this may impact your business. 

I read an article where the RBA Governor commented, ‘The Australian economy is going through a very difficult period and is experiencing the biggest economic contraction since the 1930s. In April, total hours worked declined by an unprecedented 9 percent and more than 600,000 people lost their jobs, with many more people working zero hours. Household spending weakened very considerably and investment plans are being deferred or cancelled…the nature and speed of the expected recovery, remains highly uncertain and the pandemic is likely to have long-lasting effects on the economy.’

How does it affect your business

Let’s take a look at the changes and how they will affect your business. As a result of the national minimum wage review, if the Fair Work Commission considers your industry to be one of those that is less affected by the COVID-19 pandemic, the increase will be implemented on the first full pay period after 1 July 2020.

Otherwise, the minimum wage increase will be implemented on either the 1 November 2020 or the 1 February 2021, depending on the degree of impact the Fair Work Commission considers COVID-19 has had on that particular industry.

Employers who are not covered by any modern award, the ‘National Minimum Wage’ will increase by 1.75%. This means a rise from $740.80 per week or $19.49 per hour up to $753.80 per week or $19.84 per hour from 1 July 2020. This is $13.00 more per week or 35 cents per hour to the hourly rate.

There will be three groups, with the 1𝘴𝘵 𝘎𝘳𝘰𝘶𝘱 of Awards increases commencing from 1 July 2020, the 2𝘯𝘥 𝘎𝘳𝘰𝘶𝘱 from 1 November 2020 and the 3𝘳𝘥 𝘎𝘳𝘰𝘶𝘱 from 1 February 2021. ⁠

Group 1 Awards: 1 July 2020

The first group of awards will increase by 1.75% and will start on the first full pay period on or after 1 July 2020. The awards that fall into this group are listed below:

Healthcare and social workers
  1. Aboriginal Community Controlled Health Services Award 2020 MA000115
  2. Aged Care Award 2010 MA000018
  3. Ambulance and Patient Transport Industry Award 2020 MA000098
  4. Health Professionals and Support Services Award 2020 MA000027
  5. Medical Practitioners Award 2020 MA000031
  6. Nurses Award 2010 MA000034   
  7. Pharmacy Industry Award 2020 MA000012    
  8. Social, Community, Home Care and Disability Services Industry Award 2010 MA000100
Teaching and Childcare
  1. Educational Services (Schools) General Staff Award 2020 MA000076        
  2. Educational Services (Teachers) Award 2010 MA000077
  3. Children’s Services Award 2010 MA000120
Other essential services
  1. Banking, Finance and Insurance Award 2020 MA000019
  2. Cemetery Industry Award 2020 MA000070     
  3. Cleaning Services Award 2020 MA000022       
  4. Corrections and Detention (Private Sector) Award 2020 MA000110
  5. Electrical Power Industry Award 2020 MA000088     
  6. Fire Fighting Industry Award 2020 MA000111
  7. Funeral Industry Award 2010 MA000105          
  8. Gas Industry Award 2020 MA000061
  9. State Government Agencies Award 2020 MA000121
  10. Water Industry Award 2020 MA000113
Group 2 Awards: 1 November 2020

The modern award minimum wages in the awards listed below will be increased by 1.75% from the start of the first full pay period on or after 1 November 2020.

Construction
  1. Architects Award 2020 MA000079
  2. Building and Construction General On-site Award 2010 MA000020
  3. Electrical, Electronic and Communications Contracting Award 2010 MA000025
  4. Gardening and Landscaping Services Award 2020 MA000101   
  5. Joinery and Building Trades Award 2010 MA000029 
  6. Plumbing and Fire Sprinklers Award 2010 MA000036   
Manufacturing
  1. Aluminium Industry Award 2020 MA000060  
  2. Asphalt Industry Award 2020 MA000054  
  3. Book Industry Award 2020 MA000078
  4. Concrete Products Award 2020 MA000056
  5. Food, Beverage and Tobacco Manufacturing Award 2010 MA000073
  6. Manufacturing and Associated Industries and Occupations Award 2020 MA000010
  7. Meat Industry Award 2020 MA000059
  8. Oil Refining and Manufacturing Award 2020 MA000072
  9. Pest Control Industry Award 2020 MA000097 
  10. Pharmaceutical Industry Award 2010 MA000069
  11. Poultry Processing Award 2020 MA000074
  12. Premixed Concrete Award 2020 MA000057 
  13. Salt Industry Award 2010 MA000107
  14. Seafood Processing Award 2020 MA000068  
  15. Sugar Industry Award 2020 MA000087
  16. Textile, Clothing, Footwear and Associated Industries Award 2010 MA000017
  17. Timber Industry Award 2010 MA000071
Other
  1. Animal Care and Veterinary Services Award 2020 MA000118
  2. Aquaculture Industry Award 2020 MA000114  
  3. Australian Government Industry Award 2016 MA000153
  4. Black Coal Mining Industry Award 2010 MA000001   
  5. Broadcasting, Recorded Entertainment and Cinemas Award 2010 MA000091      
  6. Business Equipment Award 2010 MA000021   
  7. Car Parking Award 2020 MA000095
  8. Cement, Lime and Quarrying Award 2020 MA000055
  9. Clerks—Private Sector Award 2010 MA000002
  10. Coal Export Terminals Award 2020 MA000045           
  11. Contract Call Centres Award 2020 MA000023 
  12. Cotton Ginning Award 2020 MA000024
  13. Dredging Industry Award 2020 MA000085      
  14. Educational Services (Post-Secondary Education) Award 2020 MA000075
  15. Higher Education Industry-Academic Staff-Award 2020 MA000006
  16. Higher Education Industry-General Staff-Award 2020 MA000007  
  17. Horticulture Award 2010 MA000028
  18. Hydrocarbons Field Geologists Award 2020 MA000064        
  19. Hydrocarbons Industry (Upstream) Award 2020 MA000062
  20. Journalists Published Media Award 2010 MA000067
  21. Labour Market Assistance Industry Award 2020 MA000099
  22. Legal Services Award 2020 MA000116
  23. Local Government Industry Award 2020 MA000112   
  24. Marine Towage Award 2020 MA000050
  25. Maritime Offshore Oil and Gas Award 2020 MA000086
  26. Market and Social Research Award 2020 MA000030 
  27. Mining Industry Award 2020 MA000011          
  28. Miscellaneous Award 2020 MA000104
  29. Mobile Crane Hiring Award 2010 MA000032   
  30. Passenger Vehicle Transportation Award 2020 MA000063   
  31. Pastoral Award 2010 MA000035
  32. Port Authorities Award 2020 MA000051
  33. Ports, Harbours and Enclosed Water Vessels Award 2020 MA000052        
  34. Professional Diving Industry (Industrial) Award 2020 MA000108
  35. Professional Employees Award 2020 MA000065         
  36. Rail Industry Award 2020 MA000015
  37. Real Estate Industry Award 2020 MA000106   
  38. Road Transport (Long Distance Operations) Award 2020 MA000039
  39. Road Transport and Distribution Award 2020 MA000038    
  40. Seagoing Industry Award 2010 MA000122
  41. Security Services Award 2020 MA000016         
  42. Silviculture Award 2020 MA000040
  43. Stevedoring Industry Award 2020 MA000053 
  44. Storage Services and Wholesale Award 2020 MA000084
  45. Supported Employment Services Award 2020 MA000103
  46. Surveying Award 2020 MA000066         
  47. Telecommunications Services Award 2010 MA000041
  48. Transport (Cash in Transit) Award 2020 MA000042  
  49. Waste Management Award 2020 MA000043
  50. Wool Storage, Sampling and Testing Award 2010 MA000044           
Group 3 Awards: 1 February 2021

The modern award minimum wages in the awards listed below will be increased by 1.75% from the start of the first full pay period on or after 1 February 2021 for the hardest it industries.

  1. Air Pilots Award 2020 MA000046          
  2. Aircraft Cabin Crew Award 2020 MA000047
  3. Airline Operations-Ground Staff Award 2020 MA000048     
  4. Airport Employees Award 2020 MA000049
  5. Alpine Resorts Award 2020 MA000092 
  6. Amusement, Events and Recreation Award 2020 MA000080
  7. Commercial Sales Award 2020 MA000083       
  8. Dry Cleaning and Laundry Industry Award 2020 MA000096
  9. Fast Food Industry Award 2010 MA000003     
  10. Fitness Industry Award 2010 MA000094
  11. General Retail Industry Award 2010 MA000004         
  12. Hair and Beauty Industry Award 2010 MA000005
  13. Horse and Greyhound Training Award 2020 MA000008       
  14. Hospitality Industry (General) Award 2020 MA000009
  15. Live Performance Award 2010 MA000081        
  16. Mannequins and Models Award 2020 MA000117
  17. Marine Tourism and Charter Vessels Award 2020 MA000093          
  18. Nursery Award 2020 MA000033
  19. Professional Diving Industry (Recreational) Award 2020 MA000109          
  20. Racing Clubs Events Award 2010 MA000013
  21. Racing Industry Ground Maintenance Award 2020 MA000014        
  22. Registered and Licensed Clubs Award 2010 MA000058
  23. Restaurant Industry Award 2020 MA000119    
  24. Sporting Organisations Award 2020 MA000082
  25. Travelling Shows Award 2020 MA000102         
  26. Vehicle Repair, Services and Retail Award 2020 MA000089
  27. Wine Industry Award 2010 MA000090 

Who will be entitled to the increase?

Employees who work in industries covered by an award or registered agreement will be entitled to the increased minimum wage rates. The minimum wage increase will also include penalty rates and allowances in their award or agreement. As per the Fair Work Ombudsman, these pay rates may be higher than the National Minimum Wage.

As a result of the increase, employees who are under the age of 21 and receive junior rates, will also be entitled to a percentage of the increase. You can use the Fair Work Pay Calculator to help you calculate the new minimum wage rate for these employees.

If you’re an employer paying above the new minimum wage, the increase will not apply to you and your employees. The fair work commission has come up with the 3 groups to recognise that the pandemic might have impacted different industries in different ways.

Get in touch

The information contained in this blog is general in nature. If you are unsure about how these changes apply to you, feel free to contact us at VeiraMal Consulting. Our HR consultants will be happy to conduct a pay audit to prepare your business for these changes.

VeiraMal Consulting offers a wide range of HR advisory services and packages to both employers and employees. You can view all our services and packages here.

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