It is that time of year again, where the Fair Work Commission’s expert panel has handed down its Annual Wage Review decision for 2017.
From the first full pay period after 1 July 2017, the national minimum wage will increase by $22.20 a week to $694.90, or $18.29 an hour. The weekly rate is to be rounded to the nearest 10 cents. This equates to an additional 59 cents an hour and is an increase of 3.3%.
Importantly, this increase also applies to Modern Awards. All minimum wage rates in Modern Awards will rise by 3.3% from the first pay period after 1 July 2017. There will also be flow on effects to numerous allowances and penalty rates in Modern Awards.
This decision is a departure from the more modest increases of the past. In making its determination, the panel made a comment that it may have been overly cautious in previous years.
Looking backwards, the most recent annual wage increases have been:
2017 – 3.3%
2016 – 2.4%
2015 – 2.5%
2014 – 3.0%
In light of the comments from the panel, employers should prepare themselves for the possibility of higher annual wage increases moving forward.
Employers should ensure their employees are paid at least the minimum amounts required under the applicable Award or Agreement.
An underpayment, even one which is an innocent mistake, exposes an employer to a number of claims and costs including:
1. back pay to rectify the underpayment;
2. contribution of additional superannuation (eg if wages have been underpaid, it is likely superannuation contributions have also been lower than they should have been);
3. fines for breaching an applicable Award or Agreement, the maximum fine, currently being
- $54,000 for a company; and
- $10,800 for an individual; and
4. cost to audit past payments to establish the extent of an underpayment (note: the Ombudsman usually requires the employer to undertake the audit at their cost and to give the results to the Ombudsman to check);
5. disruption to the employer’s business.
When it comes to underpayments, prevention is better than a cure. If you require assistance checking pay rates, please contact our Business and Employment Law team:
- Matt Bell on 4616 9860; or
- Michael Gibson 4616 9810.
This publication has been carefully prepared, but it has been written in general terms and should be viewed as broad guidance only. It does not purport to be comprehensive or to render advice. No one should rely on the information contained in this publication without first obtaining professional advice relevant to their own specific situation.
