The Fair Work Commission (FWC) has announced the 2022 minimum wage review outcome.
The key points are as follows:
- 5.2% increase to the national minimum wage
- National Minimum Wage will be $812.60 per week or $21.38 per hour
- This amounts to an increase of $40.00 per week
- The increase for Award based employees is slightly lower at 4.6%
President, Iain Ross stated that, “Given the current strength of the labour market, the adjustments we propose to make will not have a significant adverse effect on the performance and competitiveness of the national economy.”
In his address, Mr Ross talks about high inflation, low unemployment and a strong economy as grounds for the higher than normal increase.
Proportionate Increases
The different percentage increases for the National Minimum Wage (5.2% and Award Minimum Wages (4.6%) means that there is a proportionately higher increase to lower paid employees. The modern award increase of 4.6% is subject to a minimum increase of $40 per week.
This can be seen in the information released by the Fair Work Commission and will make it even more important to do careful wage compliance checks this year given the complexity that this adds to the calculations.
Timing
The increase is to operate from 1 July 2022 and must be applied from the first full pay period after that date.
However, some Awards will be delayed including those in aviation, tourism and hospitality sectors including common Awards such as:
- Hospitality Industry (General) Award 2020
- Registered and Licensed Clubs Award 2020
- Restaurant Industry Award 2020
For employees covered under those Awards, the change will come into operation on 1 October 2022.
What this means for business
Things that all businesses need to action:
- Review your rates of pay to ensure compliance with the new minimum rates – even if you already pay above Award rates, have employees on all up hourly rates or salaries, or employees under Agreements, you still have an obligation to ensure compliance with the new minimum rates.
- Be ready to implement new rates as of the first full pay period after 1 July (or 1 October if one of the delayed Awards applies to employees).
- Remember also that the Superannuation guarantee increases to 10.5% from 1 July 2022 (for all employees, regardless of Award coverage).
But before you rush in… Fair Work will spend the next few weeks releasing the updated figures for each of the Modern Awards. This may include increases in allowance amounts. So it is good to be prepared and budgeted for the increase, however if the Awards apply to your team, we recommend waiting until those Award-specific figures are available to save double work.
If you need assistance with your wage compliance checking (ether under an Award or with your Enterprise/Collective Agreement), we are ready to help. Please contact us so that we can include you in our 1 July wage compliance checks.
The summary of the decision for the Annual Wage Review 2022 can be found here, or you can watch it here.