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Minimum wage increase

Employers will need to review the wages they pay staff from the beginning of next month following the Fair Work Commission’s decision to increase ‘National Minimum Wage’ by 2.4%.

BMO Human Resources Advisor Alex Gee Kee said the increase, announced at the end of May, will see the new ‘National Minimum Wage’ rise to $672.70 per week or $17.70 per hour (based on a 38 hour working week).

This represents an increase of 2.4%, and while this is slightly lower than last year’s increase of 2.5%, it may be a challenge for small businesses to implement if they had not budgeted for the change.

Mr Gee Kee said increase would come into effect from the first pay period commencing on or after 1 July 2016.

The increase applies to all employees whose pay rates come from:

  • The National Minimum Wage (these employees are generally ‘Award-Free’)
  • A Modern Award or
  • A Registered or Enterprise Agreement,

“In the next two to three weeks, the Fair Work Commission will issue draft determinations on how the increase will affect the Modern Awards and Agreements. So at the moment it is a case of watch this space,” he said.

Mr Gee Kee urged all employers to undertake a review of the remuneration and pay structures within their business before 1 July 2016.

“If you’re not sure how this increase impacts your business and the way you pay your employees, we encourage you to seek advice from an HR adviser or contact Fair Work for clarification” Mr Gee Kee said.

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