The Annual Wage Review (AWR) 2018/2019 decision has been handed down by an expert panel of the Fair Work Commission (Commission).

The decision provides for a 3% increase to the National Minimum Wage (NMW) to $740.80 per week (or $19.49 per hour). This constitutes an increase of $21.60 per week (or $0.56 per hour).

Minimum base rates of pay in awards will also increase by 3%.

The wage increases will come into operation from the first full pay period starting on or after 1 July 2019.

The Commission panel undertook a period of detailed consultation, during which various groups and organisations put forward submissions in relation to the minimum wage. The Australian Council of Trade Unions campaigned for a “living wage” and argued for a 6% increase, which would have increased the NMW by $43.15 per week, while the Australian Chamber of Commerce and Industry had sought a maximum increase of 1.8%.

The Chamber of Commerce and Industry Queensland sought a 6-month deferral of any increase for employers affected by flooding in Townsville, however, the Panel found that sufficient justification for such a deferral was not provided and declined to defer increases for those employers.

The Panel stated that it decided to award a lower increase than 2018’s 3.5% increase, having regard to changes in the economic environment (noting the recent drop in inflation and fall in GDP growth). The Panel considered that a 3% increase would not result in adverse inflationary outcomes or adverse impacts on employment. Although the Panel noted that the increase will mean an improvement in real wages for employees who are reliant on the NMW, the Panel acknowledged that the compounding effect of increases over time is not apparent, and will be closely monitored in future NMW reviews.

The Commission will start publishing draft determinations varying awards in the coming days.

Employers should review the pay rates that their employees are receiving and ensure that those pay rates are at least equivalent to the NMW or the applicable minimum award rate. Employers should also be aware that other entitlements may apply in addition to base rates of pay (for example, penalties, overtime, loadings and allowances).