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Newsflash: Fair Work Commission announces increase to wages and a reminder of the Superannuation Guarantee increase

The end of financial year is fast approaching! With the end of financial year comes increases in cost of wages. Here is an update on all employment related increases that may impact your organisation.

Following its Annual Wage Review, the Fair Work Commission has announced that Australia’s national minimum wage AND award wages will increase by 3.75% from 1 July 2024. The national minimum wage will increase to $915.91 per week on a full time basis which is broadly in line with forecast wages growth across the economy in 2024.

This increase does not necessarily flow on to equivalent, or any increases for workers who are not paid in accordance with the national minimum wage or under a modern award. While generally, wages of non-award employees are a matter for agreement between employer and employee, it is important to note that non-award employees must be paid more than the relevant modern award classification that would otherwise apply to their employment.

The increase may also flow on to increases for employees covered under registered agreements as the base pay rate in registered agreements cannot be less than the base pay rate in the relevant modern award that would otherwise apply.

The new award rates can be estimated by applying the 3.75% increase to current award rates. However, the confirmed rates will be released by the Fair Work Commission before 1 July 2024.

The Fair Work Commission has also announced that it will focus on addressing gender under valuation in modern awards. The Fair Work Commission aims to review awards for childhood education and care workers, disability home care workers and other social and community services workers, dental assistants, medical technicians, psychologists, other health professionals and pharmacists, by the time next year’s Annual Wage Review is completed. We will keep our clients updated on proposed changes to these awards.

In accordance with scheduled increases set by the Superannuation Guarantee (Administration) Act 1992, the Superannuation Guarantee amount, currently 11%, will increase to 11.5% on 1 July 2024. Consequently, employers’ compulsory superannuation contributions for employees will increase in line with this increased rate. Employers will also need to review the effect of the increase on net wages of non-award employees on total remuneration packages.

The final scheduled increase of the Superannuation Guarantee amount will occur on 1 July 2025 when the amount will increase to 12%.

All employers need to be mindful of the increases, and ensure that your payroll is ready for the first full pay period after 1 July 2024.

While employers deduct superannuation contributions from employees’ pay each payday, they are currently only required to pass those contributions on to the employees’ superannuation funds at least quarterly. However, in order to protect workers against unpaid superannuation debts caused by employer bankruptcy, legislation has passed to increase the minimum frequency of payments. From 1 July 2026, employers will be required to pay superannuation contributions every payday. Employers should start reviewing their systems and budgeting to prepare for this change.

Need more information on these changes and how they apply to your organisation? Please do not hesitate to contact us via our contact page.

Disclaimer – Reliance on Content

The material distributed is general information only. The information supplied is not and is not intended to be, legal or other professional advice, nor should it be relied upon as such. You should seek legal or professional advice in relation to your specific situation.

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