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Bite-Size HR: The Seventh Bite

Published: December 7, 2023

Lead Training Adviser, Isabella, explains the upcoming national minimum wage increase and the 5 key steps you can do to be fully prepared for it.

Read Transcript

Hi, everyone.

My name

is Isabella

and I'm the Lead Training Adviser

here at Peninsula.

Today, I'm here to answer the question

on everybody's mind:

How to prepare

for the national minimum wage increase.

Before we get into the five key things

you should do to prepare

for the national minimum wage increase,

let me give you a bit of a rundown

of what this actually is.

So each year, the Fair Work Commission

reviews wages

across the national workplace

relations system.

This includes wages

for employees covered by awards,

and those that are award free.

At the end of the review, the Fair Work

Commission issues

a national minimum wage order,

which comes into effect

on the 1st of July every year

for all national system employees.

This means that the National Minimum Wage

and the Award Minimum Wage increases.

This increase

impacts all employers

who pay their employees

in accordance

with the minimum wage

outlined in the Fair Work Act,

and the awards.

If you pay your employees the minimum,

you need to be aware of

and prepared for the minimum wage

increase to avoid the potential

risk of an underpayment claim.

To help you prepare

for the minimum wage increase,

there are five main things you can do.

First one is to be aware of all employees

who are paid

the minimum wage,

whether under an award or not.

This is to ensure you know

which employees need to have

their wages

increased to avoid an underpayment claim.

To help you keep track of this,

consider creating a list

or a spreadsheet document

which outlines

all those employees getting paid

the minimum rate under the award.

So you're able

to increase the rate of pay

at the right time.

Number two,

don't forget about those employees

on loaded rates, annualized salaries

or annualized wage arrangements.

Any wage increase

can result in an increase

to the entitlements payable, and as such,

the loaded rate of pay

may no longer be enough

to cover the employees entitlements

that should be paid to them.

It is important

to be aware of these employees

to avoid missing any readjustments

you may need to make to ensure

their wage

still is enough

to cover their entitlements.

Following from my last point,

employers should perform

a reconciliation of remuneration

for all employees on annualized salaries

or annualized wage


in accordance with the provisions

under the award or an agreement.

Not only is this a requirement

under most awards on an annual basis,

but it also helps

with seeing if there's any adjustments

that are needed.

Number four, review

any of your contracts

to ensure they are up to date.

For example,

considering whether an offset clause

might be necessary

or any other terms

and conditions should be added

or removed along with the increase.

If you are increasing

an employee’s rate of pay,

this can also be a great opportunity

to fix or update

any other issues you might find.

And lastly, ensure

you document any increase

and have all documentation needed,

such as letters of variation

to reflect all necessary increases.

These five steps are

helpful in preparing

for the minimum wage increase.

Of course you can contact our advisors

for help

in undertaking these steps

and getting ready for the changes ahead.

We also have an exclusive client webinar

on this topic on the 4th of July.

We are emailing out

invitations shortly, so keep an eye out.

Thank you so much for your time

and see you again next time.

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