The Fair Work Commission released its 2014 Annual Minimum Wage Decision on Wednesday, 4 June 2014, awarding a 3% increase to Award-reliant employees. The FWC decision increases the national minimum wage to $640.90 per week, or $16.87 per hour. This constitutes an increase of $18.70 per week or 50 cents per hour, being the equivalent of a 3% minimum wage increase.
All Award rates of pay will increase by 3% with effect from the first pay period commencing on or after 1 July 2014.
The FWC panel acknowledged that the superannuation guarantee rate, which will increase from 9.25% to 9.5% from 1 July 2014, was a moderating factor but cited a number of reasons which supported the minimum wage increase including the ‘deterioration in the relative living standards of award-reliant workers’ [para 59].
Who is affected?
The 2014 Minimum Wage Decision applies to all employees covered by the national workplace relations system. For many Modern Awards, there were transitional arrangements in place for the initial four year period to phase in the new pay rates. From 1 July 2014, the full Modern Award rates will apply.
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, 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 2014.
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 Gordon, Solicitor, BlandsLaw