Minimum wage rise brings added strain to retailers

Published September 01, 2021 Author: Employsure
Retail Minimum Wage Rise

Employers covered under the general retail award will see an initial added strain to their finances as the minimum wage increases from September 1, but will slowly start to recover once the country fully reopens.

Unlike most awards that saw the increase take effect on 1 July, general retail is one of a small handful of industries that saw a delay due to the pandemic. As of 1 September, the national minimum wage for those covered under general retail is $20.33 per hour. In other words, the minimum a full-time employee receives is $772.60 per week.

“This rise, while in line with other industries, could not have come at a worse time for retailers, particularly those stuck in lockdown in New South Wales and Victoria,” said Employsure employment relations specialist Josh Paterson.

“The irony is that while the rise was delayed by three months for general retail because they have been one of the hardest sectors hit by the pandemic, thousands of affected business owners have been in lockdown for that entire time, and as such have not seen the profit they would have hoped for.

“While a rise to the minimum wage will cause greater financial stress to retailers initially, once lockdowns end, it will mean employees will then have more money to funnel back into the economy, which could ultimately lead to more cash back in the pockets of business owners.”

Employers are urged to educate themselves on the changes to the minimum wage, and update their payroll systems and processes to avoid the risk of underpaying employees. These concerns have been echoed through Employsure’s advice line for employers, with wage related calls spiking by 41% in July after the first round of increases

Australia isn’t tipped to fully open again until the national vaccination rate hits at least 80% double doses. Until such a time, businesses must do whatever they can to preserve as much cash as they can, while also doing right by their staff.

“While wage increases are a challenge for any business to implement, it does present an opportunity to improve financial health. Being creative with cost savings and identifying new efficiencies can help a business manage when wages increase,” continued Mr Paterson.

“A freeze to the minimum wage in the future could be an option that will help support the country’s economic recovery. We last saw it happen in 2009 due to unemployment concerns from the global financial crisis, and there’s no reason a global pandemic should be any different.”

 

 

Further enquiries:

Matthew Bridges

[email protected]

 

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