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1st June 2018, the Minimum Wage Panel of the Fair Work Commission (FWC) handed down its Minimum Wage Ruling. The FWC has awarded an increase of 3.5% to all adult full-time weekly rates in the Modern Awards from the first pay period commencing (PPC) on or after 1 July 2018. Proportionate increases will flow to part-time and casual workers, juniors, apprentices, and trainees.
The 3.5% increase results in the National Minimum Wage (NMW) increasing to $719.20 per week (or $18.93 per hour). Casual workers who remain ‘award free’ will have the casual minimum rate increased to $23.66 per hour from PPC 1 July 2018.
In awarding the 3.5% increase, the Minimum Wage Panel commented:
“The level of increase we have decided upon will not lead to undue inflationary pressure and is highly unlikely to have any measurable negative impact on employment. However, such an increase will mean an improvement in the real wages for those employees who are reliant on the NMW and modern award minimum wages and, absent any negative tax transfer effects, an improvement in their living standards. We acknowledge that the compounding effect of increases over time may have a cumulative effect which is not apparent in the short term. We will continue to closely monitor this in future reviews.”
It is important for employers to remember that it will not result in the same dollar value increase for each classification level – higher award rates will receive a higher increase in terms of the dollar amount flowed-on. For example, a 3.5% increase in the NMW is a $24.30 per week increase whereas a 3.5% increase in the standard trade-qualified (C10) rate, currently $809.10 per week, equates to an increase of $28.30 per week.
Allowances contained in each Modern Award, which are calculated as a percentage of the ‘standard rate’, will of course increase following the 3.5% per week increase to the ‘standard rate’ they are calculated from. Furthermore, expense-related allowances, specific to each Modern Award, will increase as necessary subject to the formal determinations issued by the FWC.
What happens now?
We will start the process of calculating new wages and allowances immediately. We expect to have all Modern Awards updated and released to subscribers within the week beginning 25 June. You will receive an email when a Modern Award you subscribe to has been updated on our website. The National Training Wage Schedule (as extracted from the Miscellaneous Award 2010) which provides rates of pay for trainees covered by the majority of Modern Awards will also be updated; a PDF version of this document is accessible via the ‘Fact Sheets’ page of our website.
Remember, as is our standard policy, it will be necessary to hold a subscription which will be valid as at 1 July 2018 in order to access July 2018 wages and allowances in the Modern Awards (this is a requirement even though updated rates and allowances are generally made available before 1 July).
Subscribers who have questions about this information can contact the Employer Services advice line on (07) 3220 3500 or try live chat via our website – www.employerservices.com.au