Employers are reminded of two significant changes that come into effect from 1 July 2015.
Unfair Dismissal high income threshold
The income cap for making an unfair dismissal claim will increase on July 1 to $136,700.
This means that employees who are not covered by an enterprise agreement or award are excluded from making an unfair dismissal claim if they earn over this amount. This is an increase of the high income threshold from $133,000 in the 2014-2015 financial year.
The high income threshold was first introduced in 1994. At that time it was $60,000.
The maximum compensation claim that can be awarded in a successful unfair dismissal claim has increased to $68,350 (6 month’s salary based on the high income threshold).
Minimum rates of pay
The Fair Work Commission has ruled that all federal modern award wage rates will increase by 2.5% from 1 July 2015. The weekly minimum wage will rise to $656.90 or $17.29 an hour.
Employers must now ensure that they are ready to pass on the new wage rates set by the Fair Work Commission from 1 July 2015.
We recommend that Employers take the following steps to ensure that they are not in breach of their obligations:
- Where employees are paid modern award minimum wages employers must pass on the increased wages from 1 July 2015.
- Where employees are paid rates of pay under enterprise agreements, employers should ensure that the base rates of pay under the enterprise agreement are not less than the modern award minimum rates or the national minimum wage, if it applies.
- Where employees receive annualised salaries, employers should ensure that annualised salaries take into account the increased national minimum wage (or the modern award wage if it applies).