Get ready for the 2.4% wage increase handed down in the 2016 National Minimum Wage Decision

The National Minimum Wage decision for 2016 was yesterday handed down by the Expert Panel of the Fair Work Commission (FWC), based on actual and forecasted economic and social data.

As a result, from 1 July 2016:

  • the National Minimum Wage and minimum wages in Modern Awards will increase by 2.4%;
  • the National Minimum Wage will be $672.70 per week or $17.70 per hour;
  • weekly wages in Modern Awards will be rounded to the nearest 10 cents; and
  • the casual loading will remain at 25% in Modern Awards and for casual Award/Agreement free employees.

The 2.4% increase will also flow through to:

  • employees to whom training arrangements apply;
  • juniors;
  • employees with a disability; and
  • piece rates.

Contrary to some submissions, the FWC did not grant any relief to particular industries and regions affected by natural disasters or grant a flat dollar increase, but they did agree to conduct a preliminary hearing into whether a medium-term target for the National Minimum Wage should be adopted. This will take place as part of the 2016-2017 National Minimum Wage Review.

In addition, rates of pay in Enterprise Agreements will need to at least meet the base rate of pay in the applicable industry award(s) and be checked to ascertain the specific provisions for wage increases.

What do I need to do? I have employees covered under awards

If you have award covered employees, you will need to be aware of the 2.4% increases to rates of pay (which will also affect penalty rates and certain allowances) and adjust accordingly.

If you pay above award rates, and your rates of pay remain above the new award rates, you are not obliged to pass on a wage increase unless you have a contractual obligation to do so.

What do I need to do? I have employees covered under an Enterprise Agreement

You need to check the terms of the Enterprise Agreement in respect to wage increases but in any event the base rate of pay cannot fall below the base rate in the award that would apply if there was no Enterprise Agreement.

What do I need to do? I have all award free employees

You need to ensure that rates of pay at least match the new minimum wage of $17.70 per hour (permanent) or $22.13 (casual).

What do I need to do? I have award free employees, award covered employees and employees covered by an Enterprise Agreement

You need to check all of the above!

Not sure what to do?

The Workplace can provide you with updated award rates of pay applicable to your business.

If you would like a quote for provision of updated rates of pay, please give us a call on 02 8226 8535 or email  or preferably by Friday 10 June 2016 to allow us to accommodate all of our valued clients. 

The copyright in this blog is owned by The Workplace – Employment Lawyers Pty Ltd.  The content is general information only and is not intended to constitute, or be relied upon as, legal advice.  The use of this blog by any person or company does not create any solicitor-client relationship between the person or company and The Workplace – Employment Lawyers Pty Ltd.