Employers take note! The Fair Work Commission has increased the minimum wage and has released several important changes that affect employers.
In June 2020, the Fair Work Commission (FWC) announced a 1.75% increase in the Australian minimum wage. The wage increase applies to all Award wages and is being rolled out in three stages.
Stage one of the 1.75% minimum wage increase took effect on 1 July 2020. The change affected Awards such as Frontline Health Care & Social Assistance Workers, Teachers & Child Care, and Essential Services.
Stage two of the increase took effect on 1 November 2020 and affected awards such as Building & Construction, Manufacturing, Clerks, Food & Beverage, Horticulture, Miscellaneous and Professional Services.
Stage three will take effect on 1 February 2021 and will include Accommodation & Food Services, Arts & Recreation Services, Aviation, Retail, and Tourism Awards.
You can access a full list of amended Awards and which stage they are included in on the Fair Work website.
In conjunction with the minimum wage changes, the FWC, made a determination in August 2020 that affects how casual employees are paid overtime.
In this decision, the FWC held that overtime penalty rates for casual employees could be divided into three categories. These categories are dependent on the employee’s particular Award. The categories are
- overtime penalty rates are payable in substitution for the casual loading;
- the casual loading and the overtime penalty rate are added separately to the minimum hourly rate (the cumulative approach);
- the overtime penalty rate is applied to an ordinary hourly rate consisting of the minimum hourly rate and the casual loading (the compounding approach).
Then on 30 October 2020, the FWC ruled that in addition to the categories mentioned above, for casual employees whose employment is covered by the 97 specifically identified Awards, overtime pay must be calculated using the ordinary rate of pay for casuals inclusive of the 25% casual loading.
You can access a full list of determinations for individual Awards here.
These penalty rate changes commence 1 March 2021 for the Aged Care Award and 20 November 2020 for all other affected Awards. But if you have an enterprise agreement for your employees that excludes an underpinning Modern Award, then your business will not be affected.
If you are an employer, you must make sure that you comply with the changes to both the Modern Award wages and the changes to how casual overtime is paid.
If you need more information on how these changes may affect you or your business, don’t hesitate to contact the Bolter Team.
Oh, and don’t forget to check out our articles on hiring your first employee and employment contracts on our blog. These articles will give you some practical tips to help you manage both your business and your employees