The Fair Work Commission has released its 2018 Annual Minimum Wage Decision, awarding a 3.5% increase to award-reliant employees.
The FWC decision increases the national minimum wage to $719.20 – or $18.93 an hour. This constitutes an increase of $24.30 a week or 64 cents an hour. All award rates of pay will increase by 3.5% with effect from the first pay period commencing on or after 1 July 2018.
The FWC panel stated that the labour market has improved significantly with strong employment growth. In particular, full-time employment grew by 3.1 per cent, which is significantly greater than the 1.0 per cent growth from last year. Further, it was noted that overall business conditions are at their highest levels since the global financial crisis.
It was acknowledged that the level of increase decided upon will not lead to inflationary pressure and is highly unlikely to have any measurable negative impact on employment.
Who is affected?
The 2018 Minimum Wage Decision applies to all employees covered by the national workplace relations system.
The Minimum Wage decision will not apply to:
- employers who are sole traders and partnerships in Western Australia;
- corporations in Western Australia whose main activities are not trading or financial;
- state government public sector employers and employees (except in Victoria); and
- some local government employers and employees.
If an employee is paid above the relevant modern award base rate of pay then, provided an employee’s over-award payment still results in them being paid at least the new base rate of pay, the employer will be considered to have met their obligation with respect to the minimum wage increase.
What employers need to do?
Employers have a legal responsibility to ensure that all of their employees are paid at least what they would receive under a modern award, registered agreement or national minimum wage order. We recommend a review of your payroll obligations to ensure you are meeting your responsibilities in readiness for 1 July 2018.
Should you require any assistance in reviewing your payroll obligations or if you have any questions about this wage review and its impact, please contact us.