The Fair Work Commission has released its 2023 Annual Minimum Wage Decision, awarding a 8.6% increase to the national minimum wage rate, and around 5.75% increase to award rates of pay.

The FWC decision increases the national minimum wage to $882.80 per week – or $23.23 an hour. This constitutes an increase of $70.20 a week or $1.85 cents an hour.

The Commission has observed that the relatively large jump in the national minimum wage applies to just 0.7% of all Australian employees. Because of this, and because the wages of employees who are reliant on the minimum wages in an award represent a relatively low proportion of the total wages bill, the Commission’s reasoning is that these increases will not have a significant inflationary effect.

At the same time, the Commission has noted that the increases do not address the reduction in real terms of award wages caused by inflation in recent years. This decision is clearly a tight-rope walk between cost of living pressures and fears of further inflationary stimulus.

The decision follows on from the wage increase announced in 2022, which was also historically high. Employer representatives have commented that this further wage increase comes at a time when many employers are already facing steep price increases in their businesses.

The increase will apply from 1 July 2023.

Who is affected?

The 2023 Minimum Wage Decision applies to all employees covered by the national workplace relations system. 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 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 the applicable date that applies to your industry sector.

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.

Andrew Bland

BlandsLaw