b'NATIONAL MINIMUM WAGE DECISIONWhen: Applies to the rst full pay period after 1 July Submissionsreceivedintheleaduptothedecision2025rangedfrom2%putforwardbytheCouncilofSmallBusiness Organisations Australia (COSBOA) all the wayKey Changes:up to 14.5% each year for 4 years, unsurprisingly putThe Fair Work Commission (FWC) announced the 2025 forward by the AMWU.minimum wage review outcome on June 3, 2025. The The RBA figures show an annual trimmed mean CPI ratedecision included that: of 2.8% as at end April 2025, compared to the NMWThis is a 3.5% increase to minimum award wages. increaseof3.5%.Thisispositiveforthe20.7%ofThe national minimum wage will increase to individuals reliant on the minimum Award rates as since$948.00 per week or $24.95 per hour. July 2021, those employees have suffered a reduction inThese changes will take place from the first full pay real wage rates. This is primarily a result of high inflationperiod starting on or after July 1, 2025. during2021and2022andthelast3annualwageTo understand the impact of the FWCs national review decisions not fully countering this out of concernminimum wage decision, it is relevant to know that only that it would result in higher inflation.20.7% of the workforce (approximately 2.6 million TheReserveBankofAustraliahasnowassessedthatpeople) are paid in accordance with minimum wage Australias inflation rate has returned to a sustainable 2-rates in modern awards. That means it is only that 3% and so the Commission is taking the opportunity topercentage that are directly impacted by the decision. partially balance out the previous erosion on NMW withThis cohort are mostly female, part-time or casual, an increase that is greater than the CPI.working in the industries of accommodation and foodservices, health care and social assistance, retail trade, Labour productivity is still noand administrative and support services, and more likelyto be lower paid. Because of the portion that are casual higher than it was 5 years agoand part-time, employees on the minimum rates onlymake up 10.5% of the national wage bill. However,labourproductivityisstillnohigherthanitwas5yearsagoandproductivitygrowthhasonlyFWCs brief is to make the decision on the national recently returned to a positive. Essentially, this meansminimum wage, taking into account relative living that, while the wages have been increasing over the paststandards, the needs of the low paid, workforce 5 years, as well as inflation; the actual productivity thatparticipation, performance and competitiveness of the we are generating from our workforce is stagnantsonational economy, and the need for gender equality. everyoneispayingmoreforlabour,andmoreforThey also took into account that employees will receive productsandservices,buttheamountactuallybeinga 0.5% increase in the Superannuation Guarantee on 1 producedisnotincreasing.ThatisnotasustainableJuly. equation no matter which way you run the figures.Practical Tips for Employers: 1)Check and update where needed: Contracts of EmploymentIndividual Flexibility Arrangements Enterprise Agreement Rates 2)Review salaries and all-inclusive hourly rates to ensure they remain compliant3)Ensure your payroll system updates to new Award and Superannuation rates4)Communication! We cant stress this one enough. Dont leave employees wondering or guessing what might be happening to their wages. Even if they are not receiving an increase, communicate the decision. 5)To increase productivity or performance through remuneration incentives, break the link between NMW increases (which are mandatory) and discretionary (performance based) pay increases. Wage increases applied around 1 July will be seen by employees as an entitlement linked to NMW increases, rather than recognition of their performanceor value to the organisation. Page | 4IR Update July 2025'