THE Fair Work Commission delivered its annual wage review.
The decision will have a significant impact on all businesses and industries and over 2.2 million employees who are paid at the National Minimum Wage or minimum Modern Award rates.
From the first full pay period starting on or after July 1, 2019:
• All Modern Award rates will increase by three per cent (with weekly wages rounded to the nearest $0.10)
• The National Minimum Wage will increase by three per cent to $19.49 per hour (and an extra $21.60 per week for a full-time employee), an increase of $0.56 per hour for the hourly rate, and $740.80 per week
The Commission’s decision confirms the basic increase in minimum rates while confirmation of the specific rates (including new allowance rates) for each individual Award have not yet been released. These will be released before July 1, 2019.
While there are different minimum wages for different job types and awards, each of these comes from a Government legislated Minimum Wage, which all businesses in Australia must abide by.
The new minimum wage announcement typically spurs a frenzy of cost-cutting advice, and many employers will be reconsidering their staffing needs.
Founder and managing director of workplace relations firm Employsure, Ed Mallett says: “Our small business clients tell us that there’s a lot of pressure, and that is where we can help SMEs prepare and understand what they need to do; to deal with these changes.”
SMEs may initially face an overall increase in the cost of doing business due to higher wage costs and competition for manpower from the larger firms.
“Some of our small business clients are considering reducing costs, increasing prices, reducing staff or reducing operating hours…or a mixed approach to maintain current profitability,” he said.
The yearly wage bill for Australian businesses could increase up to $2.2 billion and, “Most SMEs won’t be charging customers 3 percent extra from 1 July; but will need to come up with an extra $21.60 per week per employee, and many simply need support.”
If you pay your staff at Award level, the increase to minimum rates take effect from the first full pay period commencing on or after July 1, 2019.