On 16 June 2021, the Fair Work Commission’s Minimum Wage Panel (FWC) handed down its decision on the annual wage review. The decision provides an increase of 2.5 per cent to the National Minimum Wage, effective from the first full pay period after 1 July 2021. However, similar to the decision in 2020, taking into consideration the impact of the COVID-19 pandemic, the increases to modern award rates will be staggered. Modern awards have been grouped into three ‘clusters’, being lagging recovery, almost recovered, and fully recovered.

Factors

As the COVID-19 pandemic continues to evolve throughout Australia, the decisions surrounding wage increases have been particularly complex. In making this decision, the FWC took into account economic and social considerations including:

• Relevant industry specific data;
• The period of time between successive review increases; and
• The likelihood that future lockdowns will be of limited duration and localised; comprising of stay-at-home orders localised to particular regions with limited reasons for people to leave their home.

It also considered the various positions and submissions of the Australian Government, State Governments and interested parties, including employee associations, and employer associations.

The groups

The decision splits the operative date of the minimum wage increase based on whether an industry remains, based on research and submissions, affected by the pandemic. The groups, and operative dates are outlined in the table below.

When will the increases be effective? 

Next steps

Following this wage increase, employers will be required to:

• Review the wages of their employees;
• Ensure that processes are in place to implement the required changes;
• Consult with employees to ensure that they are aware of changes that apply to them.

In the event your employees are covered by an enterprise agreement, it is important to ensure that the base rates in those agreements remain at least equal to the new minimum Modern Award rates.

If you have any questions about the information inside of this article, please do not hesitate to contact the team at enableHR.