National Minimum Wage increasing 2.5% on 1 July

The Fair Work Commission has today released its decision on the 2020/21 national wage case. They have decided that 'the prevailing economic circumstances and the uncertainty surrounding the pathway out of recession' requires a 'cautious approach to both the quantum and the timing of an adjustment to the National Minimum Wage (NMW) and modern award minimum wages.'

With some identified exceptions, still badly affected by COVID-19 (aviation, tourism and arts), most modern awards and the NMW will increase by 2.5% from 1 July 2021. The NMW will increase to $772.60 per week ($20.33 per hour) resulting in a $18.80 increase per week for full time adult employees.

The data considered by the FWC showed that the Australian economy has transitioned from recovery to expansion earlier and with more momentum than previously anticipated, but there is an ongoing expectation of COVID related challenges because of the current rate of COVID vaccination take-up and localised outbreaks of the virus underpinning the conservative approach taken by the FWC.

Modern Awards will be updated, ready for 1 July but you can start to review your wages against your current award by adding a 2.5% to the relevant classifications. Payroll functions will need to be amended to take the pay rise into account in the pay cycle after 1 July 2021.

If you are unsure about whether a modern award applies to you, or how the NMW increase will affect you, we can assist you. Please contact us at reception@nfplawyers.com.au or on (07) 3160 0010.

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