Fair Work Commission – 1.75% increase to minimum wages

The Fair Work Commission recently announced a 1.75% increase to minimum wages. This applies to all award wages.

Increases to awards start on 3 different dates for different groups of awards.

Essential services workers were the first to receive the increase, however, the Commission has staged the increase for those in other industries. All 122 modern awards were placed into three groups.

Usually, the increase is effective in the first full pay period on or after 1 July for all modern awards and the national minimum wage. This year is different.

The Commission used ABS data to assess how certain ‘industry clusters’ have been affected by COVID-19, noting these fell into three distinct groups.

The ‘arts and recreation services’ and ‘accommodation and food services’ clusters have been the most adversely affected. They experienced the highest decline in jobs and the largest decline in total wages.

Increases in Stage 1 Awards came into effect on 1 July 2020.

Stage 2 Awards include the Horticulture Award, Sugar Industry Award, Cotton Ginning Award and the Pastoral Award and the 1.75% will come into effect from 1 November 2020.

The Nursery and Wine Industry Awards are included in Stage 3 awards and these will come into effect from 1 February 2021.

For anyone not covered by an award or an agreement, the new National Minimum Wage will be $753.80 per week or $19.84 per hour. Overall, this is an increase of $13 per week.

This applies from the first full pay period starting on or after 1 July 2020.

The increase doesn’t affect employees who already get paid more than their new minimum wage.

If you are paying your employees in excess of the new Award minimum, the minimum wage increase can be absorbed. Similarly, if you have offset any award entitlements into an above award payment (e.g. annual leave loading or leading hand allowances), you will need to conduct a reconciliation of each employee’s salary to ensure that they are receiving at least the equivalent of the new minimum wage plus the value of the entitlements.

The Pay Guides are available at: