Annual wage review — 2.5% rise in the national minimum wage

The Fair Work Commission Minimum Wage Panel has just handed down its decision under the Fair Work Act, increasing national minimum wage rates by 2.5 per cent (lower than the increase of 3.0% ordered last year).

All increases will apply from the first full pay period after 1 July 2015.

The national minimum wage will increase by $16.00 per week from the current $640.90 per week ($16.87 per hour) to $656.90 per week ($17.29 per hour) from the first full pay period after 1 July 2015. The weekly rates are based on a 38 hour week and weekly wages should be rounded to the nearest 10 cents.

Minimum award rates will increase for each classification level, while award allowances linked to the standard weekly rate will also increase by 2.5 per cent. Other allowances in modern awards will increase by the percentage movement in the applicable CPI figure.

For employees covered by an individual flexibility agreement, employers should ensure that the rates of pay under the agreement are at least equivalent to the applicable modern award rates for equivalent award classifications.

What does the increase really mean for upcoming private and APS wage rises?

The 2.5 per cent rise does not apply to employees who are already being remunerated above the minimum wage. Accordingly, the annual wage increase tends only to directly affect those workers who are paid base wages. It will be interesting to see what impact this decision may have on the currently protracted round of public sector enterprise bargaining negotiations.

For more information on how the increase in wage rates and allowances may affect your employees, please contact the Meyer Vandenberg Employment, Workplace Relations and Safety Team:

William Ward | Special Counsel
(02) 6279 4444