Jul

19

Minimum Wage Increase

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Minimum Wage Increase

On 1st July 2010, Fair Work Australia implemented its decision to increase the national minimum wage by $26 per week. In addition, the casual loading rate for employees who are not covered by an award or agreement increased from 20 percent to 21 percent. The increase coincides with the first phase of the transition to modern award pay rates.


Who does this affect?

The increase affects all employees who are covered by a modern award. The new rates have flowed through to overtime loadings and penalty rates under the relevant award.

For workplaces operating under a Registered Workplace Agreement, such as an Enterprise Agreement, employers are obliged to keep pace with the modern award base rates or the minimum wage. Employers must ensure that the Registered Workplace Agreement does not undercut the modern award base rates, or the minimum wage if no award is applicable.


Can the increase be phased in?

The increase may be phased in under transitional provisions provided for under the relevant modern award.

To qualify for these provisions, the employer must have been paying the employee under a State Award prior to 1st January 2010. If the employee began employment after this date, the transition provisions cannot be used to phase in this increase.

If the employer qualifies under these provisions, the increase can be phased in at a rate 20 percent per year between 1 July 2010 and 1 July 2014. The first 20 percent was payable on the first pay period on or after 1st July 2010.


Penalties

Employers must ensure that they comply with the new minimum wage. Failure to adhere to these provisions could result in back payment of wages and fines of up to $6,600.00 for an individual and $33,000.00 for a company.


Conclusion

The new increase has affected the vast majority of employees and it is vital that employers act to ensure that no underpayments have been made to staff from 1st July 2010. Employers should also find out whether they are entitled to phase in wage increases under the transitional provisions.

If you have any queries or require any advice in relation to the national minimum wage increase, or any other employment law matter please contact Tony Pattinson at Ferguson Cannon Lawyers.

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Category: Employment Law, Fact Finders, General

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