Minimum Wage And Award Wages In Australia.

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Employee And Employer Looking At Screen For Changes To Clerks Award

Breaking – Fair Work Commission Announces 2020-21 Minimum Wage Increase

The minimum wage in 2020-21 will increase by 1.75% per cent to $19.84 per hour. In other words, a full-time employee will receive a $753.80 per week.

Unlike other years, the date the change comes into effect will be different depending on the industry:

1 July 2020: National minimum wage and Group 1 Awards

  • Frontline healthcare and social assistance workers
  • Teachers and childcare workers
  • Other essential services

1 November 2020: Group 2 Awards

  • Construction
  • Manufacturing
  • A range of other industries

1 February 2021: Group 3 Awards

  • Accommodation and food services
  • Arts and recreation services
  • Aviation Retail Trade
  • Tourism

The following guide refers to the current minimum wage, which will last until 30 June 2020.

Minimum Wage In Australia – A Quick Definition

The current minimum wage in Australia is $740.80 per week, which equates to a minimum hourly rate of $19.49. The minimum wage is the absolute lowest that an employee can be paid. This minimum wage was set on May 30, 2019 and must be adhered to by all businesses operating in Australia.

The Minimum Wage In Australia

Understanding minimum wages in Australia is one of the most important elements to maintaining an effective cost structure when running a business. There are certain standards set in place by the Fair Work Commission which dictates minimum grades of pay for different job roles across all industries, and if you aren’t fully aware of each of your employees’ minimum wages, you could find yourself underpaying them.

Every year on 1 July Australia’s minimum wage changes, subject to a decision by the Fair Work Commission.

The minimum wage also changes each year for employees in the Western Australian State System, as determined by the Western Australian Industrial Relations Commission. The minimum wage sets out the minimum rate an employee may be paid. But of course, it’s not that simple. As with many things in workplace relations, it’s unfortunately not quite so clear cut. There are different awards or agreements which may impact on the minimum that an employee should be paid.

What Is The Minimum Wage In Australia?

The current National Minimum Wage is $19.49 per hour, or $740.80 per 38-hour week (before tax). There are different minimum wages for different job types and awards, each of these stems from one core minimum wage which all businesses in Australia must abide by.

However, when it comes to working out what your employees’ minimum wages are, you also need to factor in their minimum entitlements under the relevant Award or Agreement. These entitlements are differentiated across a variety of factors such as industry, job type, experience in the role, etc and hold potential repercussions if they are not met. So it is important that employers understand minimum entitlements.

Employers should also know that if they have employees who are not covered by an Award or Agreement, they will have their wage set by the National Minimum Wage Order.

National Minimum Wage Rates In Australia

YEAR
WAGE (per hour)
WAGE (per week)
2007
$13.74
$522.12
2008
$14.31
$543.78
2009
Unchanged
Unchanged
2010
$15.00
$569.90
2011
$15.51
$589.30
2012
$15.96
$606.40
2013
$16.37
$622.20
2014
$16.87
$640.90
2015
$17.29
$656.90
2016
$17.70
$672.70
2017
$18.29
$694.90
2018
$18.93
$719.20
2019
$19.49
$740.80
2020
$19.84
$753.80

FREE Minimum Wage Guide Download

Learn to survive the minimum wage increase in 2019 with this free guide today!

Frequently Asked Questions

  • Who Decides The Minimum Wages?

    In the interest of Australia’s employees and businesses alike, the base wage, or minimum wage, received by employees in the national workplace relations system are determined by a specialist panel within the Fair Work Commission.

    These minimum wage rates are reassessed on an annual basis to guarantee that employees of Australia are awarded their fair income. Upon the annual assessment of minimum wages, if any determinations are made to change or vary wages in Modern Awards or a National Minimum Wage Order, they will apply from the first full pay period on or after 1 July each year. But prior to this implementation, the Fair Work Commission must publish any adjusted wage rates in a Modern Award before 1 July each year.

    This is to guarantee that employers, and employees alike, have enough notice to make the adjustments to their own business operations. So even if you are fully aware of your employees’ minimum wages one year, you still need to stay on top of any potential changes on an annual basis on minimum wages under Modern Awards.

    There are a lot of factors which come into determining minimum wages, some of which 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 (i.e the employee gets a pay rate for the amount picked, packed, pruned or made)

    It should go without saying, but employers must know that an employee cannot be paid less than the base rate of pay that would be payable to them under their associated Modern Award.

  • Does An Employer Have To Pay The Minimum Wage?

    Yes. As the name suggests, the minimum wage is the minimum that an employee must be paid. This may be outlined in an award, agreement or as set by the Commission. A business owner can always decide to pay higher if they choose.

  • What Happens If An Employee Is Paid Above The Award Wage?

    As an employer, you may choose to pay an employee above the minimum wage outlined by the Commission, award or agreement. However, you will need to watch out for increases to the wage rates and make sure that you are paying above any new rate. It is recommended you review your wages each time there is a change to ensure that you are paying on or above the minimum wage. If your business is not keeping pace with the relevant pay increases, you could risk underpaying your staff.

  • What About Employees Who Are Not Covered Under A Modern Award – What Wages Do They Need To Be Paid?

    If an employee is not covered by an award or agreement that the national or state minimum wage applies (depending on if the business is covered by the Fair Work system or the WA state system).

    As you can see, minimum wage is not one size fits all. As an employer, you need to be incredibly efficient with keeping up-to-date on your staff’s ages and circumstances, you will need to be aware of increases that can affect how much to pay your staff.

  • Do Different States Have Different Minimum Wages?

    Most states fall under the Fair Work Act 2009 and as such, the current national minimum wage is $19.49 per hour. However, in Western Australia if the business is a non-constitutional corporation, the Western Australian system will apply. In those cases the minimum wage is currently $19.66 per hour.

    While all employment in Victoria, ACT and the NT is covered by the national system, please note the above information does not include all state or local government employees. For example, if you are a private entity performing contract work for a state or local government, you would be covered by the national system. For all other states, refer to the Modern Awards or enterprise agreement your employees are under, or contact Employsure, for more information.

  • Does the Minimum Wage Alter for Employees in Different Age Groups?

    This will depend on the award or agreement the business may fall under. Awards and agreements may stipulate a percentage of the adult wage for anyone who is defined as a junior employee.

    If a business is deemed to be Award Free under both the Fair Work system and the Western Australian State legislation, generally junior rates will apply until the age of 20.  The rates tend to increase in increments and as such the rate for a 16 year old will differ from that of a 17 year old. Once the employee reaches 21 in this circumstance, the full adult minimum wage will apply.

  • Do Employment Categories and Employee Experience Impact Wage Rates?

    Yes it may. Wage rates may differ based on:

    • the award or agreement which applies
    • employment categories or type, i.e.: casual employees or full-time employees
    • employee experience, i.e.: apprentices or trainees, years of experience within an industry
    • employees’ duties, i.e.: supervisor or manager level
    • work hours, i.e.: penalty rates, overtime, and allowances
  • Does Minimum Wage Change, Based on Industries?

    The national (or state) minimum wage will not change based on industry. However minimum wages are also captured in awards and agreements. These awards and agreements are often aligned to the industry or occupation in which the employee works. As such minimum wages may be impacted by industries.

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