The Fair Work Commission’s Expert Panel for annual wage reviews (Panel) has today published its Annual Wage Review 2019-20, in the first split minimum wage decision since 1997.

The outcome of the review is that:

  • the National Minimum Wage and modern award minimum wages will increase by 1.75%; and
  • the National Minimum Wage will increase to $753.80 per week (up from $740.80 per week) or $19.84 per hour (up from $19.49 per hour).

Staged implementation

While the National Minimum Wage will increase from 1 July 2020, in recognition that the impact of the COVID-19 pandemic has not been consistent across all sectors of the economy, the Panel has determined that modern award increases will be rolled out in stages.

The three-stage process, beginning with sectors assessed as being less impacted by the COVID-19 pandemic, is as follows:

Operative Dates Award Group
1 July 2020 Group 1 Awards Frontline health workers, social assistance workers, teachers and childcare workers and other essential services such as funeral, cleaning and banking workers
1 November 2020 Group 2 Awards Construction, manufacturing and similar industries
1 February 2020 Group 3 Awards Accommodation and food services, aviation, retail and tourism industries

Please click on the above links for access to the modern awards in each Award Group

The majority Panel declared that the COVID-19 pandemic ‘casts a large shadow over the current economic environment’[1] and that these adjustments are necessary as the Panel is obliged to take into account the likely impact of any exercise of modern award powers on the performance of the national economy.

What does this mean for employers?

The Panel’s decision means that employers who pay their employees at the National Minimum Wage (and under certain industrial instruments) will need to increase their employees’ pay in the first pay period on or after 1 July 2020.

Employers who pay minimum wage rates pursuant to a modern award (and certain industrial instruments), will be required to increase their employees’ pay in the first pay period on or after 1 July 2020, 1 November 2020 or 1 February 2021 - depending upon which modern award applies.

Employers who pay their employees under an industrial instrument, such as a collective or enterprise agreement, should review the rates under those instruments to ensure that they are equal to or above the applicable minimum wage rates.

Employers who pay their employees above the minimum wage rates may be able to absorb the increases without making any changes.