Today, the Fair Work Commission (FWC) delivered its 2015 minimum wage order. The order included a determination that the federal minimum wage will increase by 2.5% to $656.90 per week and the new minimum hourly rate is $17.29. Modern award minimum rates were also increased by 2.5%. Weekly wages will be rounded to the nearest 10 cents. For businesses across the country this means updating payroll systems and making sure rates of pay are correct. The changes announced by the FWC will take effect from 1 July 2015, so employers should start getting ready now.

Just to recap from our previous blog:

Employers will generally fall into one of four categories for the purpose of reviewing their wages – those who pay under an award, those who pay under an employee collective agreement, those covered by both awards and employee collective agreements as well as award/agreement free employees or those who are not covered by either an award or agreement.

We have outlined the key steps that employers should now take in the lead up to 1 July 2015.

Employers who pay under an award

Review the relevant modern award(s) for each classification of employees covered by the business
Update any necessary payroll information to reflect the changes in the award(s) that impact rates of pay

NOTE: Changes for the new financial year may not be limited to rates of pay. For example, the junior classifications in the General Retail Award 2010 will change on 1 July 2015 so that employees 20 years of age with more than 12 months experience will receive the full adult rate of pay where they had previously received 95% of the adult rate.

Employers who pay under an employee collective agreement

Review the employee collective agreement – what does it say about wage increases? Agreements can deal with wage increases in different ways and employers need to ensure that they are complying with the obligations set out in their agreement. If you’re not sure what your agreement says, we can help you understand it better.
Section 206 of the Fair Work Act says that regardless of what an agreement says, all rates of pay must, at least, meet the relevant award minimums. This means that even after any increase required under an agreement is applied, employers should still audit their rates against the relevant modern award to make sure they meet or exceed the minimums for each classification.

Employers who are not covered by an award or an agreement

If no award or agreement covers an employer and their employees, they will be covered by the federal minimum wage.
To ensure compliance, employers should compare their rates of pay against the federal minimum wage to ensure they are meeting or exceeding the minimum rate of pay.

To help you get ready for 1 July 2015 and stay compliant, we are offering a wage update service. If you would like our expert assistance and advice, please contact THE WORKPLACE or give us a call on (02) 8226 8535.

Information in this blog is based on the live streaming of the decision by the Fair Work Commission at 2.15pm on 2 June 2015.At the time of publication of this blog, the full decision of the FWC was not available.