The Fair Work Commission has announced that with effect from the first full pay period commencing on or after 1 July 2019, the minimum wage rates set out in modern awards will increase by 3%.
For employees not subject to a modern award or enterprise agreement, the National Minimum Wage will also increase by 3% to $740.80 per week (or $19.49 per hour).
What should employers do?
Employers should carefully review the rates of pay and conditions being afforded to their employees who are subject to a modern award to ensure they will be in a position to meet their higher obligations from 1 July 2019. If an employer is unsure whether any of its employees are covered by a modern award, the employer should determine this immediately.
Employers who are covered by an enterprise agreement should also review the agreement to ensure that the base rates of pay for the employees who fall within the enterprise agreement are not less than those that would be payable under the relevant modern award.
For those employees who are not covered by a modern award or enterprise agreement, employers should take steps to ensure they are paying those employees an amount of wages not less than the National Minimum Wage for all hours worked from 1 July 2019.
Why is this important?
There are significant sanctions available against employers that do not comply with an applicable modern award, enterprise agreement or the National Minimum Wage, including civil penalties of up to $63,000 per breach for corporations as well as orders for compensation for any damage suffered as a result of the breach. An individual involved in a breach may also be personally subject to a penalty of up to $12,800 per breach. For example, earlier this month a Victorian farming business and its director were penalised $120,000 and $24,000 respectively for underpaying two workers a total of approximately $13,000 for work performed in 2015 and 2016 and for issuing inaccurate payslips (for more, see FWO v Zucco Farming Pty Ltd & Anor [2019] FCCA 1277).
Disclaimer
This article is general commentary on a topical issue and does not constitute legal advice. If you are concerned about any topics covered in this article, we recommend that you seek legal advice.