Winter is coming and with it the end of the financial year. Besides getting your accounts in order, this time of year is often when changes to federal government policies and entitlements come into effect. These policies may impact your business, so it’s important to stay informed of any changes, including the recent increase in the minimum wage and various Award amounts. You need to be aware of your employees’ current entitlements to understand how these different pay rates will affect your business. You then need to ensure that you satisfy the new requirements before they come into effect.

Changes to Awards and the Minimum Wage

From the 1st July 2016, the new national minimum wage will increase to $672.70 per week or $17.70 per hour, and pay rates will increase by 2.4% across all Awards and some registered agreements.

As an employer, you are required to meet either the minimum pay requirements under the National Employment Standards (if no Award or agreement applies) or at the rate of pay set out in the applicable Award, enterprise or registered agreement.

If you do not meet these minimum wage and Award requirements, you may be required to pay back the unpaid entitlements owed to employees and pay fines per the Fair Work Act 2009 (Cth). Therefore, it is important to ensure that the rates of pay are correct from the start. Just this week a Perth restaurant was ordered to pay $13,822 back to two employees as they had underpaid the employees under the Restaurant Industry Award.

If your employee is currently paid less than the new minimum wage of $17.70 per hour, you should ensure from the 1st July 2016 you increase their wages to this amount. If your employees are already paid above this rate, for example, $18, then you are not required to change your rates of pay if no other Award, enterprise or registered agreement applies.

If you have any policies or agreements in place that set out rates of pay, these should also be updated to ensure that these documents reflect the new rates.

Does an Award Apply?

Many of our clients who are employers themselves ask us, “how do I know if an Award covers my employee?” This is reasonably easy to determine.

There are two different ways that Awards can apply. This can be either via industry type Awards, for example, employees working in the Retail Industry or Hospitality Industry are covered by each equivalent award. An Award could also relate to the type of job, for example, administrative assistance in an office can come under the Clerks – Private Sector Award 2010.

If your employees’ role falls under an Award or an applicable registered agreement, you should refer to the updated pay rates and confirm that you are paying the minimum rates. If your employment agreements refer to the specific pay rates of these Awards, you should ensure that these are also updated.

For example, under the Restaurant Industry Award, the rate of pay for a Level 4 Food and beverage attendant grade 4 is currently $764.90 per week and $20.13 per hour. Under the new changes, the rates of pay would be $783.26 per week and $20.61 per hour.

Key Takeaways

As of July 1st, 2016, the amount of minimum wage and Awards will increase. If you are an employer, you should familiarise yourself with the changes and new rates, and adjust your employees’ wages accordingly.

If you are unsure about the changes to the minimum wage or Award rate of pay, then contact us today on 1300 544 755. Our employment lawyers can assist you with all your employment matters including employment agreement drafting and Awards research.

Edith Moss
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