Fair Work Commission Increases Minimum Wage by 3.75%

The Fair Work Commission (FWC) conducts the National Wage Case annually to decide whether the minimum wage should be increased and, if so, by how much. Today, the FWC announced its decision to raise the minimum wage starting from the first pay period on or after July 1, 2024. This change will affect the base rate in all Modern Awards.

ServoPro will ensure members receive the updated award rates as soon as they are made available.

This decision will have a ripple effect across all Modern Awards, increasing base rates. The FWC will release draft and final Determinations for each Award in the upcoming weeks.

The recent decision from the National Wage Case has resulted in a 3.75% increase in the minimum wage, which now stands at $915.90 per week or $24.10 per hour.

The Commission noted that while there is a connection between the National Minimum Wage and Modern Awards, it is not direct or automatic.

The Commission highlighted that the change in the National Minimum Wage directly affects the 0.7% of Australian employees not covered by an Award or an Agreement and thus receive the minimum wage.

“Approximately 20.7% of the Australian workforce, or about 2.6 million employees, are paid according to the minimum wage rates in Modern Awards. These employees and their employers are directly impacted by this decision. Additionally, there are categories of employees indirectly affected by the Review outcomes being ‘flowed on’ in various ways. We estimate that this decision will influence the wages of about a quarter of all Australian employees,” the Commission explained.

Considering the current economic climate, the nature of employees covered by the Minimum Wage, and the weak productivity growth, the Commission decided to increase the Modern Award base rates by 3.75%.

New rates for the Awards in fuel wholesale, transport, retail, and administration will take effect from the first full pay period on or after July 1, 2024.

This decision clearly impacts the wage rates in all Modern Awards, requiring all employers to review their employment contracts before the new rates come into effect.

Each year, the FWC evaluates the cost of living, productivity indicators, and the overall health of the Australian economy to ensure the minimum wage rates in the Awards provide a living wage. While not all National Wage Cases result in an increase, most do.

The 3.75% increase for the 2024/2025 year is lower than the 5% increase sought by employee groups but is a significant rise compared to the 2% sought by employer groups.

ServoPro Members can access current award wages and 200+ HR policy and procedure templates inside our member’s area. Members can also call our HR Helpdesk for help with anything related to employment.

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