The Fair Work Commission has determined a minimum wage and Modern Award increase of 3.75% earlier today for the new financial year commencing 1 July 2024. The National Minimum Wage will increase to $915.90 per week (up from $882.80) which is an increase to $24.10 per hour (up from $23.23).
Who gets the increase?
The increase of 3.75% is applicable to both employees not covered by a Modern Award (so entitled to at least the National Minimum Wage) and to employees covered by a Modern Award. The Modern Award rates will increase by 3.75%.
When does the increase apply?
The increase comes into effect as of the first full pay period on or after 1 July 2024.
What if I pay above the minimum award rates?
You are not statutorily obliged to increase the hourly rate if you already pay your employees above the National Minimum Wage or the applicable Award Minimum Rates. But we recommend you don’t just assume that you still comply. It is important that you check your above Award rates against the increased Award rates to ensure that you are still paying above the minimum. You should also double check that your set-off clause in your employment contracts (the one that allows you to apply above Award wage rates against other Award entitlements like penalty rates and allowances) is sufficient to ensure your entitlement to apply a set-off.
What if I have an Enterprise Agreement?
If your employees are covered by an Enterprise Agreement, you will still need to review the impact of the National Minimum Wage and Award rate increases. The base rate of pay under your Enterprise Agreement must not be less than the base rate of pay that would be payable to your employees under an applicable Modern Award or, if an Award does not apply, the National Minimum Wage. Your Enterprise Agreement will not override the Award rate increase if, as a result of the increase, your Enterprise Agreement rates are less than the new Award rates. For assistance with your enterprise agreement questions, contact us.
What you need to do now
To minimise your legal risks (and underpayment is a serious matter), we recommend you:
- determine and re-verify if or which Modern Award applies to each of your employees;
- re-check the classification in that Modern Award that applies to each of your employees;
- identify when an applicable wage rate increase comes into effect – given your pay cycle;
- ensure that you are paying employees at least the minimum wage rate, or above (including if you already pay above the Award or are covered by an Enterprise Agreement);
- ensure that you update your payroll system with any new applicable rates; and
- ensure you have a valid set-off clause if you pay an annual salary or above Award rates.
Queries
If you have any questions about this article, please get in touch with the authors or any member of our Employment, Workplace Relations & Safety team.
Disclaimer
This information and the contents of this publication, current as at the date of publication, is general in nature to offer assistance to Cornwalls’ clients, prospective clients and stakeholders, and is for reference purposes only. It does not constitute legal or financial advice. If you are concerned about any topic covered, we recommend that you seek your own specific legal and financial advice before taking any action.