To the surprise of many employer and industry groups and despite particularly challenging macroeconomic circumstances arising from the COVID-19 pandemic (including an anticipated fall in Australian GDP by up to 8%) and a significant increase in unemployment –
The Fair Work Commission’s Minimum Wage Panel (Panel) has increased the National Minimum Wage, together with all Modern Award minimum rates of pay by 1.75%.
The FairWork panel heard “sharply polarised” positions in relation to the wage increase with the government holding back any expression on its position other than to advocate for a cautious approach to change.
Employer and industry groups contended that minimum wages should either not increase, or increase at a later stage in the year – this was recommended as many employers are unlikely to be in a position to absorb any increase in labour costs which would adversely impact upon employment and the economic recovery.
While the Australian Council of Trade Unions (ACTU) acknowledged that employers in many industries are adjusting to significant reductions in consumer demand, it sought an increase of 4% to improve the living standards of low paid workers and also act as a stimulus to the subdued economy.
Due to the uncertain outlook for the economy whilst also taking into consideration workers living standards, effects on low paid workers and unemployment rates, the panel determined that a 1.75% increase was justified and necessary, increasing the minimum wage to $19.84 per hour.
The increase will take place in 3 grouped stages across the financial year.
If you would like help reviewing what Award your employee group falls in to and the date of change please contact PeopleStart here