From 1 February 2021, the 1.75% minimum pay rate increase has taken effect for a whole range of Modern Awards (those in ‘Group 3’). This is the final round of increases from the staggered increases the Fair Work Commission announced in July 2020. This was a break from the normal protocol of nation wide increases being applied across all industries from 1 July and has meant that businesses need to be extra vigilant in checking whether the Awards that apply to them are included in each round.
There are 27 Awards in total in ‘Group 3’ impacted by these increases and you can see the full list of them here. Please check this list to see if any of your team are impacted.
A few key points for employers to note:
- If you are covered by an Enterprise Agreement (EA), the terms of the EA take precedence, however you still have an obligation to ensure your agreement base rates are not less than the minimum Award rates;
- The 1.75% increase applies to the first full pay period after 1 February 2021;
- If you are already paying your employees above Award rates and your rates continue to be above the new minimum rates, you may not be required to pass on the increase – but make sure your rates are still compliant, particularly if you use a salaried or all up hourly rate approach which wraps in elements beyond the hourly rate;
- The new minimum rates also apply to any work an employee performs while they’re in the JobKeeper scheme.
If you need assistance with checking your compliance, please contact us.