How Group 3 Employers can Prepare for the Minimum Wage Increase
As a business owner, you may be feeling confused about the new Minimum Wage Increases for Group 3 that come into effect on 1st November 2021. Group 1/2/3? What is happening? You may want to bury your head in the sand, as it all seems so over-complicated. Fear not! In this blog post, you will get a full breakdown of the Group 3 Minimum Wage increase and advice on how to prepare for it.
Why are the increases staged in 3 groups?
The Minimum Wage is the lowest amount you can pay an Employee who works for a business that falls under the National Workplace Relations System. This means employees to whom an Award applies, defined by the Fair Work Act 2009. This is reviewed each year in The Annual Review. Due to the pandemic’s extensive effect on businesses, the increases were staged into 3 groups.
Why is preparing for stage 3 important?
The FWC announced a 2.5% wage increase to all national minimum wage and all award wages after The Annual Wage Review 2021. This has been rolled out in all 3 stages, starting on July 1st, 2021. The national minimum wage is $20.33 per hour or $771.60 per week. All 3 stages must be paid this new amount by November 1st.
It’s vital to factor in these increased costs into your business’s financial projections.
What does the increase include?
Permanent full-time and part-time award free adult employees must be paid at least the minimum wage rate as their base rate of pay per hour worked. The base rate of pay does not include any of the following:
- Incentive‑based payments or bonuses
- Loadings
- Allowances
- Overtime
- Penalty rates
Casual employees are paid the minimum wage rate plus a ‘casual loading’ of at least 25% of the minimum wage.
Confused by Wages and Modern Awards?
Staying up to date with legislation can be a challenge but is essential for employers who want to remain compliant. Our FREE Wages and Modern Awards E-Guide provides employers with an overview of Australia’s Modern Award system and explains the ten National Employment Standards that every business must follow.
Which Awards are affected?
- Air Pilots Award 2020
- Aircraft Cabin Crew Award 2020
- Airline Operations – Ground Staff Award 2020
- Airport Employees Award 2020
- 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
Considerations
Employers who currently pay above National Minimum Wage or Award rates of pay are not bound by this decision to increase rates of pay. Employers need to look at their rate of pay and make sure their rates remain beneficial once the increase is applied.
If you pay any of your employees under an annual salary arrangement, consider preparing an audit of those salaries against the new Award rates to ensure the annual wage is in line with Award entitlements.
About Employsure
Employsure is one of Australia’s largest workplace relations advisers to small and medium-sized businesses, offering workplace relations and heath & safety support. We take the complexity out of workplace legislation to help small business owners protect their company and their people.
