Employers still battling through chronic staff shortages, record inflation of 5.1%, and rising costs will be soon hit with another financial blow with the standard minimum wage set to rise by 5.2% and the award minimum wage increasing by 4.6%.
From July 1, the standard minimum wage will rise to $21.38 per hour ($812.60 per week) with the award minimum wage subject to a minimum increase of $40 per week (depending on the award). This represents a large impact for all employers with small and medium size enterprises (SME’s) that make up over 95% of Australian businesses particularly exposed.
Employment relations experts, Peninsula representing over 32,000 businesses within Australia reacted to the announcement:
“The impact of this change cannot be understated, businesses are already doing it tough and with this announcement from the Fair Work Commission, it feels like business owners just can’t catch a break” said Peninsula CEO, David Price.
“We are anticipating an influx of calls in the thousands from concerned employers seeking help around how they will implement and afford these changes. It is an unfortunate reality that some businesses who are already on the edge will simply no longer be able to operate”
While the overall effect of this change has yet to be seen, there are concerns this may create a domino effect with increased staff expenses to be passed on to the consumer compounding already high cost of living pressures.
“We recommend any business seeking help around interpreting these changes to seek advice, get informed, and prepare to update their payroll systems to avoid underpayment when the increase comes into effect.” Mr. Price concluded.
