A recent decision made by the Fair Work Commission (FWC) regarding the annual wage review will significantly impact your business.
The FWC has announced a substantial increase of 5.75% to Modern Award minimum wages for all classification levels. These new rates will come into effect from the first full pay period commencing on or after 1st July 2023.
The FWC’s decision was influenced by various economic and social factors, including the rising cost of living, a strong labour market, high inflationary pressures, increased superannuation contributions, gender equality considerations, productivity growth concerns, and projected economic slowdown for the 2023-24 financial year.
To ensure your business is compliant and prepared for the implementation of the new award rates, we strongly encourage you to take the following steps:
1. Review Minimum Rates of Pay and Terms
- Carefully review the minimum rates of pay, terms, and conditions for employees covered by Awards within your business.
- Process necessary pay increases from the first full pay period in July 2023 to ensure compliance.
2. Review Employee Salaries
- Assess the salaries of employees covered by Awards to ensure they continue to result in their better-off position compared to the Award rates.
3. Review Enterprise Agreement Base Rates
- It is crucial to note that if your employees are covered by an enterprise agreement you must ensure that the base rates in those agreements remain equal to or higher than the new minimum Modern Award rates.
4. Communicate with Team Members
- Engage and inform your team members about the upcoming changes to the Award rates.
- Address any questions or concerns they may have to maintain a transparent and supportive work environment.
Taking proactive measures now will help your business smoothly navigate the upcoming changes and maintain compliance with the updated regulations. Failure to comply with the new award rates could result in financial penalties and reputational risks for your business.
We strongly urge you to prioritise these actions to minimise disruption and ensure the well-being of your employees.
Remember, the implementation date is fast approaching. Act now to secure your compliance and the success of your business.
Increase to superannuation guarantee
In 2021 the Federal Parliament passed legislation that gradually increases the superannuation guarantee by 0.5% each financial year. This increase is separate to the Annual Wage Review as conducted by the Fair Work Commission.
As of 1 July 2023, the superannuation guarantee rate will also be increasing from 10.5% to 11%.
Employers will be required to apply the 11% superannuation guarantee rate to payment of wages/ordinary time earnings made on or after 1 July 2023. The increase in the superannuation guarantee is based on when the payment of ordinary time earnings is made and not when the ordinary time earnings are worked.
Note: This is provided for informational purposes only and does not constitute legal or expert industrial relations advice. Employers are advised to consult with employment law professionals to ensure compliance with applicable laws and regulations.
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