2008 Minimum Wage Decision, July 2008

On 8 July 2008, the Australian Fair Pay Commission (AFPC) announced its 2008 minimum Wage Decision, increasing the standard Federal Minimum Wage and all Australian Pay and Classification Scales (Pay Scales).

The decision has two main elements:

1. Increasing the standard Federal Minimum Wage from $13.74 to $14.31 per hour; and

2. An approximate increase for adult rates of pay in Australian Pay and Classification Scales (Pay Scales)to $21.66 per week ($0.57 per hour).

These increases flow on to junior employees, employees to whom training arrangements apply, employees with a disability, casual employees and employees receiving basic piece rate of pay, effecting more than 1 million pay scale reliant workers.

Unlike previous decisions, the AFPC’s decision is not a differential decision and therefore applies to all minimum rates of pay in Pay Scales. The Commission indicated that the intent behind a general application is in an attempt to avoid overlapping, duplication or conflict with parts of the award modernisation process currently being undertaken by the Australian Industrial Relations Commission.

What this means is that if an employer is currently paying some or all of its employees the minimum wage, those employers will be bound by the pay increase.

If employers are paying employees above the minimum wage, they will not be bound by the decision except to the extent that the new minimum wage is under the employee rate of pay. For example, if an employee was receiving $10 per week above the minimum wage, the 2008 wages decision will bind his/her employer to increase the wage by at least the difference, being $11.66 per week ($21.66 less $10).

Employers who are subject to AFPC decisions in their collective agreements or AWA’s will also need to adhere to the decision.

The decision takes effect from the first pay period on or after 1 October 2008.

For further details about this article or the award modernisation process and how these decisions may effect your business, please contact Andrew Bland at[email protected].

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