Minimum Wage In Australia.

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National Minimum Wage

The current national minimum wage in 2021 is $19.84 per hour or $753.80 per week for a full-time employee.

Fair Work Commission Announces 2020-21 Minimum Wage Increase

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

Minimum Wage Definition

The Fair Work Commission conducts an Annual Wage Review and usually increases all National Award minimum wages by two to three percent from the first full pay cycle on or after 01 July of each year for those businesses and employees that fall under the National Workplace Relations System. These are mainly businesses and occupations that are covered by an Award regulated by the Fair Work Act 2009 (the Fair Work Act). This covers most private businesses in Australia.

Due to the impacts of COVID-19 the National Award minimum pay rates will increase only by 1.75% for 2020/2021 and the Fair Work Commission has staggered the annual wage increase to ease the corresponding financial burden on businesses. The Commission is introducing the increases in 3 stages, and the changes apply to 3 different groups of Awards. Group 1 Awards were increased from 01 July 2020. The minimum rate increased for Group 2 Awards from 01 November 2020. The final increase will occur for Group 3 Awards from the first full pay period starting on or after 01 February 2020.

However, some private businesses are not covered by the Fair Work Act. In Western Australia for example, any business that is not a constitutional corporation – if the business is not a proprietary limited company and is a sole trader, for example – is covered by the Western Australian State System. The Minimum Pay Rate for Businesses with employees that fall under the WA State System is decided by the Western Australian Industrial Relations Commission (WAIRC). 

In WA the State System minimum wage will also increase by 1.75% but not until the first full pay period starting on or after 01 January 2021.

Please call Employsure if you are unsure whether you fall under the National Workplace Relations System and if a National Award applies to your business, or if you require wages for an Employee under the WA State System.

What is the Minimum Wage increase?

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, so to whom an Award applies that was introduced under the Fair Work Act. There are also known as Modern Awards. The minimum wage can also apply to Businesses who are covered by a Registered Agreement that has been approved by the Fair Work Commission.

From 01 July 2020 the minimum pay rate for full-time adult employees who aren’t covered by a Modern Award (so-called Award-free employees), but are covered by the National Employment System (NES) and the Fair Work Act, is $19.84 an hour, or $753.80 a week, before tax. This absolute minimum will also apply to employees who fall under an Award once the rate increase for 2020/2021 has been applied to that Group of Awards.

However, some employees have a different minimum wage depending on their employment type, age or work capacity. In addition, a Modern Award may provide that an employee should get paid more than the minimum pay rate for Award-free employees based on their classification under an Award, and the hours they have worked. So how the employee is employed, their age, the type of work they do, and when they do it, as well as any experience and qualification they may have, will determine the applicable rate of pay for the actual hours worked.

Who Does the Annual Award Wage Increase Apply to?

The annual increase applies to Employees who are Award-free but fall under the National Employment Relations System, and so are entitled to the National Minimum Wage, as well as those employees who are covered by a Modern Award or an Enterprise Agreement. The increase for Award -free employees was implemented from the first full pay period on or after 01 July 2020 this year.

The increase doesn’t affect employees who already get paid more than the new minimum wage after the increase has been implemented.

FREE Minimum Wage Guide Download

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

When Will My Award Increase?

Only a few Awards had a wage increase as of the first full pay period starting on or after 01 July 2020, mainly those Awards that cover Essential Services such as Health Services and Child Care. These are the so-called Group 1 Awards.

The wages for the majority of Awards (Group 2) increased recently from the first full pay period starting on or after 01 November 2020. This increase applied to Awards that mainly cover Industry, such as Construction and Manufacturing.

The final increase will apply to the remainder of the Awards (Group 3) from the first full pay period starting on or after of 01 February 2021, and will cover business in industries that have really been affected by the pandemic such as the following:

  • Accommodation and Food Services
  • Arts and Recreation Services
  • Aviation
  • Retail
  • Tourism

Please contact Employsure for more information on how to determine what Awards your Business and Employees may be covered by and what Pay Rate will apply.

Frequently Asked Questions

  • Who Decides The Minimum Wages?

    The minimum wage rates are reassessed on an annual basis by a specialist panel within the Fair Work Commission. Employer groups and unions are allowed to make submissions to this panel, and these submissions are taken into account when the minimum wage is decided.

  • 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.

  • What Is the Minimum Wage in Western Australia?

    For employers under the Western Australian state relations system, there will be an increase of 1.75% per week to the Minimum Wage and state award pay rates from the first full pay period on or after 01 January 2021. For employers in Western Australian, but under the national workplace relations system, the minimum wage is $19.84 per hour.

  • 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.

  • What Is The Difference Between A Salary And A Wage?

    A wage is a rate of pay commonly affixed to a period of time such as per hour, or per day. A salary is a fixed regular payment agreed upon in an employment contract however is not affixed to the number of hours performed.

  • Are Apprentices Entitled to Minimum Wage?

    Yes. Apprentices are entitled to a minimum rate of pay which will primarily depend on what Apprenticeship they are completing and what Modern Award they fall under. An Apprentice’s age, what level of schooling they have completed, and how long ago they left school, as well what stage of the Apprenticeship they are at will also affect their minimum rate of pay.

    Call Employsure for help on how to determine what minimum rate of pay applies to your apprentice.

  • How Much Do Mature Age Apprentices Get Paid?

    A mature age apprentice is essentially an adult apprentice, so anyone who is 21 years of age or older. An adult apprentice gets a higher minimum pay rate than a junior apprentice and may possibly command an even higher rate of pay if they have worked in the business prior to starting their Apprenticeship.

  • What Is the Minimum Wage In Australia After Tax?

    This will depend on the Employee’s personal circumstances and their tax liability as determined by the Australian Tax Office (ATO). Unfortunately, Employsure is unable to give Financial Advice.

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