From 1 July 2017, all employees paid under a modern award or paid the national minimum wage will be entitled to a pay increase.

What are the increases?

The national minimum wage will increase to $694.90 per week (or $18.29 per hour). The weekly rate is based on a 38 hour week for a full-time employee. This constitutes an increase of $22.20 per week (or 59 cents per hour).

Additionally, minimum wages in all modern awards will increase by 3.3% from the first full pay period starting on or after 1 July 2017. Employers should check the updated wage rates in the applicable modern award.

The 3.3% increase will also apply to:

  • junior employees;
  • employees to whom training arrangements apply; and
  • employees with a disability;

Employers should also check if there are other additional costs in:

  • any piece rates that use the base rate of pay in the modern award for calculation; and
  • any allowances that use the base rate of pay in the modern award for calculation.

Information about the minimum wage increases is available from the Annual Wage Review 20162017 Decision [2017] FWCFB 3500 and the Annual Wage Review 2016 – 2017 Statement [2017] FWCFB 3501.

Decision on penalty cuts

On 5 June 2017, a Full Bench of the Fair Work Commission published the Penalty Rates – Transitional Arrangements decision (Decision). The gradual reduction of the Sunday penalty rates is summarised in the table below:

INDUSTRYCURRENT RATE01.07.1701.07.1801.07.1901.07.20
Retail – Full-time200%195%180%165%150%
Retail – Casual200%195%185%175%175%
Pharmacy- Full-time200%195%180%165%150%
Pharmacy – Casual225%220%205%190%175%
Hospitality – Full-time175%170%160%150%150%
Hospitality – Casual175%175%175%175%175%
Fast Food – Full-time150%145%135%125%125%
Fast Food - Casual175%170%160%150%No change

The Decision also determined that public holiday penalty rates would be reduced from 1 July 2017 without any transitional arrangements. Effectively, full time and part time employees covered by the Hospitality, Restaurant, Retail, Fast Food and Pharmacy Awards will have their public holiday penalty rates reduced from 250% to 225%. Meanwhile all casual employees under these awards will receive a public holiday penalty rate of 250% across the board.