Today the Fair Work Commission’s Minimum Wage Panel (MWP) handed down its fourth annual wage review under the Fair Work Act 2009 (Cth). 

The outcome of the review is that from 1 July 2013:

  • modern award minimum wages will increase by 2.6%; and

  • the National Minimum Wage will increase to $622.20 per week (up from $606.40 per week) or $16.37 per hour (up from $15.96 per hour). 

In coming to its decision, the MWP considered a number of factors including the state of the Australian economy, the impact of the carbon price on inflation and the increase to the superannuation guarantee to take effect from 1 July 2013. 

The MWP concluded that while economic conditions over the past year have remained reasonably strong and the economic outlook remains favourable, the expected drop in GDP growth and the expected increase in unemployment, together with other factors, warranted only a small improvement in the real value of modern award minimum wages and a lower increase to the National Minimum Wage compared to last year.

The MWP considered submissions put forward by a wide range of parties including the Australian and State Governments, collective bodies representing employees and employers and other oganisations.

In practical terms, the decision of the MWP means that employers who pay their employees at minimum wage rates pursuant to a modern award, the National Minimum Wage or other industrial instrument, will be required to increase their employees’ pay in the first pay period on or after 1 July 2013.  Employers who pay their employees above the minimum rates of applicable modern awards or other industrial instruments may be able to absorb the increases without making any changes.