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Minimum Wage Increase Group 3 Awards

Published January 29, 2021 (last updated February 18, 2021) -
Fitness instructor pleased with award wage increase

Just as you thought you were shaking off the effects of the COVID-19 pandemic on your business, – you might be hit with a minimum award wage increase. This  increase will only apply to a certain number of awards, specifically awards where the minimum rate of pay has not already been increased, either from the first full pay periods on or after 01 July 2020 or 01 November 2020.

Annual Wage Review

Each financial year, the Fair Work Act 2009 requires the Fair Work Commission (FWC) Expert Panel to review the national minimum wage and modern award minimum wages. These minimum wages apply to employees within the National Workplace Relations System, which covers the majority of workplaces in Australia. The FWC does their research and encourages input from industry, businesses and individuals who will be affected by any changes.

Increases usually take place from the first full pay period on or after 01 July, in the amount of two to three percent, however due to the outbreak of coronavirus in 2020 the Fair Work Commission announced an increase of only 1.75% and staggered the award minimum wage increases to introduce them in three phases, effective from the first full pay period on or after 01 July 2020, 01 November 2020 and 01 February 2021 respectively.

This final minimum wage increase is effective from the start of the first full pay period on or after 01 February 2021 and applies to those modern awards in industry sectors which have arguably been the most adversely affected by the COVID-19 pandemic:

  • Accommodation and food services;
  • Arts and recreation services;
  • Aviation;
  • Retail trade;
  • Hair and Beauty; and
  • Tourism.

What Is The Minimum Wage?

The minimum wage is the least amount you can pay your employee for ‘ordinary’ hours worked in Australia. Ordinary hours are the regular hours an employee normally works (excluding overtime) up to 38 hours a week as dictated by the National Employment Standards (NES), which are minimum employment standards contained in the Fair Work Act.

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, currently $19.84 per hour, or $753.80 per week (before tax) based on a 38-hour working week.  The base rate of pay does not include any of the following:

  • incentive‑based payments or bonuses;
  • loadings;
  • allowances;
  • overtime; or
  • penalty rates

Casual employees are paid the minimum wage rate plus a ‘casual loading’ of at least 25% of the minimum wage.

Most employees in the national workplace system are covered by a modern award. Awards set-out the minimum wage, as well as other terms and conditions, for employees in particular industries and occupations. Award Pay Rate Schedules have different pay rates for different levels under the award depending on employee experience and qualifications. In addition, employees may be entitled to allowances, penalty rates or loadings depending on when they work and what work they do.

Workers employed through enterprise agreements or individual agreements made with their employer are also subject to the minimum wage, or the minimum award rate where an award would otherwise apply, and any pay calculations in the agreement must be reflect at least the same pay increase as the minimum wage increase.

Download our free e-guide for a full list of modern awards impacted by the latest rate increase, and information on how to apply the increased rates or call us for free initial advice on 1300 651 415.

Free Minimum Wage E-guide

 Guidance on how to apply the minimum award rate increase to your business

About Employsure

Employsure is one of Australia’s largest workplace relations advisers to small- and medium-businesses, with over 25,000 clients. We take the complexity out of workplace legislation to help small business employers protect their business and their people. Call our team to receive free initial advice on any workplace relations topic.

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