The Fair Work Commission (FWC) has announced a 3.5% minimum wage increase as part of its 2017/18 annual wage review. This decision applies to the National Minimum Wage and all Modern Award minimum rates of pay.
The revised National Minimum Wage will increase to $719.20 per week (which is a $24.30 increase) or $18.93 per hour.
Several factors influenced the FWC to reach this decision, including a healthier national economy and labour market from the previous year. Full-time employment continues to grow, and business conditions remain positive, and the FWC believes that low wage growth will continue to support this.
The changes will be effective from 1, July 2018.
What do I need to do?
If lucent advisory currently processes your payroll– nothing for now.
As your outsourced payroll provider, we will make these changes for you to ensure your organisation remains compliant. Should you have employees who are paid the minimum Award rate, we will apply an increase of 3.5% to ensure no one falls below the Award minimum requirements. We will work with you to apply any increases by the first full pay run post 1 July 2018.
If lucent advisory DOES NOT process your payroll…
- You will need to ensure that for any employees you currently pay at the National Minimum Wage or Modern Award rates of pay, you apply the 3.5% increase in the first full pay period on 1 July 2018 or thereafter.
- If you are currently paying above the National Minimum Wage or Modern Award rates of pay, then you are not required to apply any increases. Though, you should still ensure that the rates you are paying are reasonable and beneficial in comparison to the increased minimum rates.
- If you pay under enterprise agreements, you will need to ensure that the base rates are at least equal to the increased Modern Award rates.
How could this minimum wage increase affect small businesses?
There is concern that the increase in minimum wages will have a significant impact on many small businesses. Businesses who already operate on tight profit margins and who pay predominately minimum wages may need to adjust their profit targets to afford the extra $24.30 per week per employee. However, the Fair Work Commission argues that small and regular wage increases are not determinantal as they do not inhibit workforce participation.
You can find out more details about the minimum wage increases here.
Outsourcing your payroll with lucent advisory not only streamlines all your payroll activities, but it means that whenever new changes such as these come in, you can be sure your business will always remain up to date and fully compliant. If you have any questions regarding these changes, please feel free to get in touch via email or give us a call on 8471 7007.