Get set for a new national minimum wage for the new financial year

On 1 July 2023, the national minimum wage (NMW) and modern award minimum wages will increase by 5.75% following the Fair Work Commission (FWC) Expert Panel decision handed down earlier this month.

The National Minimum Wages applies to Australian employees that are not covered by awards or enterprise agreements. It will actually increase by 8.65% because of a change to how the wage is calculated.

The key outcomes for the 2023 Annual Wage Review are as follows which will see:
• the current weekly minimum wage increase from $812.60 to $882.80 (an increase of $70.20 per week); and
• the current hourly minimum wage increase from $21.38 to $23.23 (an increase of $1.85 per hour);
• a 5.75% increase will apply to modern award minimum wages across the board.

Any employee not covered by a modern award or enterprise agreement will, from the first full pay period on or after 1 July 2023, be entitled to a minimum weekly wage for 38 hours of work equal to $882.80, or $23.23 an hour (plus the 25 per cent casual loading in respect of casual employees).

From the first full pay period on or after 1 July 2023, any employees covered by a modern award are to be paid no less than the new modern award wage in respect of the employee’s classification under the modern award. This change also includes casual loading and other loadings, penalties, allowances or overtime, which are calculated by reference to the modern award minimum pay rates.

Employers should review annual salary packages for award-covered employees to ensure they are adequate to compensate them for their award entitlements (and the increase in the Superannuation Guarantee rate to 11% on and from 1 July 2023).

Remember that if base rates of pay under an enterprise agreement covering an employee are less than the base rates provided in an award covering the same employee (or the National Minimum Wage if award-free), the latter rates prevail.

More information on award changes can be found on the Fairwork Website.

If you need any assistance please don’t hesitate to contact us on 03 5833 3000.