Employers should note the following changes will apply from 1 July 2019:
1. National minimum wage
The national minimum wage, which applies to employees not covered by an award or enterprise agreement, will increase by 3% from 1 July 2019. The new national minimum wage will be $740.80 per week or $19.49 per hour. This is an increase of $21.60 per week or 56 cents per hour from the 2018/19 rates.
2. Minimum award wage rates
Updated award pay rates will be released shortly, but until then, employers can assume that minimum wage rates in modern awards will increase by 3% from 1 July 2019, with weekly wages rounded to the nearest 10 cents.
Employers should also note that from 1 July 2019:
Some penalty rates in hospitality and retail awards will change;
The casual loading will remain at 25% in most modern awards and for award/agreement free employees; and
The casual loading in the Business Equipment Award 2010 will increase to 24%.
Employers should review applicable awards and adjust wage rates for award employees as necessary. Note that it is not necessary to increase salaries for award employees who are paid above award rates, provided minimum award conditions are met.
If your business operates under an enterprise agreement, the Fair Work Act requires that you ensure the base rates of pay in your enterprise agreement is at least as high as the new base rate of pay in the applicable modern award. Employers should also check their enterprise agreements for any other wage increase mechanisms and increase those rates as necessary.
3. High income threshold
The high income threshold will increase from $145,400 to $148,900 from 1 July 2019. This means that:
Employees whose annual rate of earnings is more than $148,900 and who are not covered by an award or enterprise agreement will not be able to bring an unfair dismissal claim;
The maximum compensation that can be awarded to an employee in unfair dismissal proceedings will be $74,450; and
The minimum guaranteed wage to be a high income employee for the purposes of award coverage will be $148,900 from 1 July 2019.
Employers must continue to contribute 9.5% of an employee’s ordinary time earnings to a complying superannuation fund. The maximum superannuation contributions base for 2019/20 will be $55,270 per quarter (or the equivalent of $221,080 annually). This means that employers must make superannuation contributions equal to 9.5% of an employee’s ordinary time earnings to $55,270 per quarter. Employers need not make superannuation contributions with respect to earnings above this cap unless they have a contractual obligation to do so.
5. Fair Work Information Statement
The Fair Work Ombudsman will issue an updated Fair Work Information Statement in the near future. Once available, the updated version should be issued to each new employee before, or as soon as possible after, they start employment.