Minimum wage increase - are you ready?

From 1 July 2011 minimum wages will increase in line with Fair Work Australia Minimum Wage Panel's decision of 3 June 2011.  The increases are as follows:

  • An increase of 3.4% to all modern award minimum weekly wages.
  • An increase of $19.40 per week ($0.51 per hour) to the National Minimum Wage bringing the minimum weekly rate for award/agreement free employees to $589.30 per week ($15.51 per hour).
  • An increase in the casual loading for all award/agreement free employees to 22%.

The increases flow through to junior employees, employees to whom training arrangements apply, employees with a disability, and employees who are paid piece rates.

What should employers do?

If they have not done so already, employers who pay employees at minimum wage rates under a modern award, the National Minimum Wage or other instrument, should update their payroll systems to pass on the minimum wage increases from 1 July 2011. Employers applying the transitional provisions of modern awards should also ensure that they pass on the correct increase while transitioning to the next pay point under the relevant modern award. 

Employers who pay above minimum wages under modern awards should be able to absorb the increases without making any changes.

Employers covered by workplace and enterprise agreements should also be able to absorb the minimum wage increases, however they should review the rates under their agreements to ensure that employees are being paid at least the applicable minimum wage rate as increased from 1 July 2011.

On hold: Reduced minimum engagement hours for after-school casuals working in retail

On 20 June 2011, following an application by the National Retail Association, Fair Work Australia carved out an exception for the rule imposing a 3-hour minimum for shifts for casual employees employed under the General Retail Industry Award 2010 (Award). 

The exception provided that secondary school-aged employees could work for 90 minute shifts, provided that certain requirements were met.  This exception was due to commence on 1 July 2011.

However, the determination has been stayed until an appeal by the Shop, Distributive & Allied Employees' Association is heard.  This means that the exception will not take effect on 1 July 2011 as originally ordered. 

If the appeal is unsuccessful, employers covered by the Award may engage employees for 90 minute shifts if all the following circumstances apply:

  • the employee is a full time secondary school student;
  • the employee is engaged to work between 3.00pm and 6.30pm on a day which they are required to attend school;
  • the employee agrees to work, and a parent and guardian of the employee agrees to allow the employee to work, a shorter period than three hours; and
  • employment for a longer period is not possible due to the operational requirements of the employer or the unavailability of the employee.