More West Australian SMEs to struggle under next wave of wage increases

Published January 03, 2021 (last updated January 25, 2022) -
WA Min Wage

Employsure, Australia’s largest workplace relations advisor, urges employers in Western Australia covered under the state industrial relations system to ensure they’ve updated their payroll, as the minimum wage increases.

As of 1 January, the minimum wage and state award pay rates for employees who are not apprentices or trainees has increased by 1.75% per cent. The full-time weekly rate for a permanent adult 21 years and older has risen from $746.90 to $760 ($19.66 to $20 an hour). The changes do not apply to employers covered by the Fair Work Act 2009.

“While employers will be looking to start off the new year on the front foot, this increase comes at a time when many of them still simply can’t afford it,” said Employsure Managing Director Ed Mallett.

“Businesses across Western Australia are still trying to financially recover the losses suffered in the COVID-19 pandemic.

“Many who were on the original JobKeeper wage subsidy scheme are now either no longer eligible, or are on the new reduced payment. Sadly, some have closed over the past few months, and others are barely hanging on.”

Employers are urged to educate themselves on the changes to the minimum wage to avoid the risk of underpaying employees. The rate of pay is different for every age level from the legal working age to 21 years, and it’s up to business owners to be aware and pay their employees accordingly.

Understanding minimum wages in Australia is one of many crucial elements an employer should be aware of when running a business. Employers and employees cannot legally be paid less than their applicable minimum wage, even if they agree to it.

On top of an employee’s minimum rate of pay, there are additional entitlements under the relevant Award or agreement on top of their hourly rate such as allowances, penalties and overtime. These entitlements are set apart across a variety of factors such as industry, job type, hours and days of work and location, and is therefore important for employers to understand and abide by.

“The wage increase will have an administrative and financial impact on the bottom line, as it does every year. However, businesses shouldn’t see the change as a time to consider reducing staff numbers or increase product costs,” continued Mr Mallett.

“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.

“I believe a freeze to the minimum wage in the future 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 a global pandemic shouldn’t be any different,” he concluded.

Further enquiries:

Matthew Bridges

[email protected]

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