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The Minimum Wage In Australia.

What is the current minimum wage in Australia?

The National Minimum Wage is currently $17.70 per hour or $672.70 per 38-hour week (before tax). Casual employees are covered by this wage and also receive at least 25% casual loading

The minimum wage is an employee’s base rate of pay for ordinary hours worked, and relates to the relevant Modern Award, Enterprise Agreement, or the National Minimum Wage order.

Employers must provide their employees with at least their minimum entitlements, as outlined by the relevant agreement. Employees who are not covered by an Award or Agreement will have their wage set by the National Minimum Wage order.

Who determines minimum wages?

The base wage received by employees in the national workplace relations system are determined annually by a specialist panel of the Fair Work Commission. Any determinations made to vary wages in modern awards or a National Minimum Wage order will apply from the first full pay period on or after 1 July each year. The Fair Work Commission must publish any adjusted wage rates in a modern award (as a result of an Annual Wage Review Determination) before 1 July each year.

Minimum wages under Modern Awards may include:

  • wage rates for adults, in some cases, at different rates according to experience and qualifications
  • wage rates for juniors, employees with a disability, and employees to whom training arrangements apply
  • casual loadings
  • piece rates (ie the employee gets a pay rate for the amount picked, packed, pruned or made)

An employee cannot be paid less than the base rate of pay that would be payable to them under their associated Modern Award.

What happens if an employee is paid above the award wage?

Under a Modern Award, the wages for each classification are the lowest possible wage rate. An employer can pay more than this wage but never can an employer pay less. Even though an employee is being paid above the award wage, both employers and employees need to be aware of any increases to the award wage. This is important because as long as the employee is being paid above the award wage, the employer does not need to increase the employee/s wages on 1 July because the base requirement is already being met. However, when the time comes that the employee’s wage is less than the base wage, your wages paid must increase to at least the minimum wage.

What about employees who are not covered under a Modern Award – what wages do they need to be paid?

The Fair Work Commission adjusts wages under Modern Awards, including the National Minimum Wage Order (the order). This is a base wage for employees who are not covered under a Modern Award or an Enterprise Agreement. An employee cannot be paid less than this wage order. The order is effective from 1 July each year and like a Modern Award wage, it will change from year to year.

What else needs to be added to the base rate of pay?

  • Penalty rates
    Employees often get higher rates when they work late nights, early mornings, weekends or public holidays. Penalty rates come from the Modern Award or Enterprise Agreement and they are different for each industry and job. Employees who are not covered by an Award or Agreement and who are covered by the National Minimum Wage, do not get penalty rates unless their contract says they should.
  • Overtime
    What is considered overtime is different under each Award or Agreement. Overtime is usually any work in excess of 38 hours in a week, or outside the ordinary hours listed. Overtime is often paid at a higher wage (such as time and a half). Instead of being paid an overtime rate, an employee may be able to take time off instead. This is called time in lieu (TOIL). Employees who are not covered by an Award or Agreement will not be paid overtime unless their contract says they do.
  • Allowances
    Allowances are extra payment for:
    – doing certain tasks
    – using a certain skill
    – working in certain conditions
    – using your own tools at work

For example, an employee may get an allowance for:
– using their own car to carry work materials
– wearing a special uniform or clothing that needs cleaning
– supervising other staff
– doing certain types of work
– being a first aid officer at work

Always check the Award or Agreement for specific allowances as each industry will vary.

Employsure can take the hassle out of understanding minimum wages and other entitlements for your industry. We ensure you are aware of your obligations under the Fair Work Act and remain up to date on any legislative changes that will impact your business.

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