Minimum wage increase

The Fair Work Commission has decided to increase minimum wages by 2.4%. The new national minimum wage will be $672.70 per week, or $17.70 per hour.

The increase takes effect from the first pay on or after 1 July 2016. Even award-free employees must receive at least the national minimum wage.

Increase to award wages

Minimum wages in awards will increase by 2.4%. Employers will need to check that award covered employees are paid at least the minimum award rates from the first pay period starting on or after 1 July 2016.

Even where the employer is a party to an enterprise agreement, it must ensure that the base rates of pay provided under that agreement are at least equivalent to the new minimum rates of pay.

High income threshold will increase to $138,900

From 1 July 2016, the high income threshold for unfair dismissals will increase to $138,900 per annum. The issue of what elements of remuneration are included or not included in the high threshold can be complex, and advice should be sought before terminating an employee. For example, compulsory superannuation contributions are not included in the calculation of an employee’s earnings for these purposes.

Employers should also remember that employees above the high income threshold can still claim unfair dismissal if they are covered by an award or an enterprise agreement.