Fair Work Commission announces 2.5% increase to the national minimum wage

The Full Bench of the Fair Work Commission has today decided to increase the National Minimum Wage by 2.5%, and for the same increase to be applied to the minimum wages set out in each modern award.

The Commission considered data made available to the Review and, based on the ongoing economic impact to certain industries and the pace of the vaccination rollout, has determined that the 2.5% increase will take effect, once again, on a staged basis.   Whilst the increase will take effect for the majority of awards from 1 July 2021, the Commission deferred the operative date for increases to some awards to 1 September 2021 and 1 November 2021 (see below for a list of the awards and operative dates).

In the Full Bench’s Summary: Annual Wage Review 2020-21 decision, the Commission made the following comments in relation to the decision to award an increase given the upcoming increase to superannuation guarantee:

[24] Consistent with the position taken in past Review decisions, the Panel has taken the 0.5 percentage point increase in the Superannuation Guarantee rate into account in determining the level of increase in minimum wages in this Review, but has not applied a direct, quantifiable, discount to the minimum wage increase. The 2021–22 Budget made several other announcements regarding changes to support businesses and to households.

[25] Taken overall, the change in circumstances—the markedly better economic environment, the scheduled SG increase and the tax–transfer changes—weigh in favour of a higher increase than was awarded in last year’s Review.

The effect of the increase will mean that the National Minimum Wage will increase from 1 July 2021 by $18.80 per week, from the current $753.80 per week ($19.84 per hour) to $772.60 per week ($20.33 per hour).

Operative dates for increases

 1 July 2021

  • National Minimum Wage
  • All other awards (not listed below)

1 September 2021

  • General Retail Industry Award 2020

1 November 2021  

  • Air Pilots Award 2020
  • Aircraft Cabin Crew Award 2020
  • Airline Operations – Ground Staff Award 2020
  • Airport Employees Award 2020
  • Airservices Australia Enterprise Award 2016
  • Alpine Resorts Award 2020
  • Amusement, Events and Recreation Award 2020
  • Dry Cleaning and Laundry Industry Award 2020
  • Fitness Industry Award 2020
  • Hair and Beauty Industry Award 2010
  • Hospitality Industry (General) Award 2020
  • Live Performance Award 2020
  • Mannequins and Models Award 2020
  • Marine Tourism and Charter Vessels Award 2020
  • Nursery Award 2020
  • Racing Clubs Events Award 2020
  • Racing Industry Ground Maintenance Award 2020
  • Registered and Licensed Clubs Award 2020
  • Restaurant Industry Award 2020
  • Sporting Organisations Award 2020
  • Travelling Shows Award 2020
  • Wine Industry Award 2020.

Employers should ensure that where the Modern Award rate is being paid, the increase is passed on to their Award-covered employees in accordance with their Award and the applicable timeline.

It is also essential that Employers review pay rates for employees currently receiving over-Award payments, or engaged under Enterprise Agreements, to ensure that they do not underpay their employees when compared against the revised award rates, and/or continue to comply with the remuneration provisions of the Enterprise Agreement.

Contact Aitken Legal for any enquiry about the wage increase and its application to remuneration arrangements, including through Modern Awards and Enterprise Agreements.

Disclaimer: The information contained this article is general and intended as a guide only. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this update, Aitken Legal does not accept liability for any errors it may contain. Liability limited by a scheme approved under professional standards legislation.