Everything you need to know about this year’s annual wage increases

Posted on 24/6/2020

HR & Recruitment

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Overview:

The Fair Work Commission recently completed its annual review of wages for Australian workers, announcing a 1.75% increase that will be rolled out in stages across different industries depending on how severely they have been impacted by COVID-19.
minimum wage jobs

In handing down the decision to increase the adult minimum wage and Award wages by 1.75% from July 1, the Fair Work Commission also announced that a different approach would be taken to implementing the wage increases across different Awards and industries due to COVID-19.

Specifically, the Commission has announced that there will be different effective dates for the wage increases depending on how badly certain industries have felt the impacts of COVID-19. All 122 Australian employment Awards have been categorised into one of three groups, with Group 1 being the least affected and Group 3 the most impacted by COVID-19.

Broadly speaking, the Groups have been categorised as follows:

Group 1 Awards – From first full pay period on or after 1 July 2020:

  • Frontline healthcare & social assistance workers
  • Teachers and childcare
  • Other essential services workers

 

Group 2 Awards – From first full pay period on or after 1 November 2020:

  • Construction
  • Manufacturing
  • Legal services
  • Range of other industries

 

Group 3 Awards – From first full pay period on or after 1 February 2021:

  • Tourism
  • Retail
  • Accommodation and food services
  • Aviation
  • Arts and recreation services

The full list of categorised Awards based on the above grouping criteria can be found below or on Fair Work Commission’s website.

News of the impending wage increase amidst the pandemic, has been a decision understandably resented by many business owners who are already struggling through the crisis. Particularly for those in the tourism and hospitality industries, where revenue has come to a near standstill over recent months, a wage increase for their employees may potentially represent further financial stress.

 

How does JobKeeper impact the wage increases?

If your business currently has employees on JobKeeper, it is important to note that the wage increases applies to any work they perform while on this scheme, provided they are ordinarily employed under the minimum wage or their employment is governed by an Award.

JobKeeper dictates that the employee must be paid the higher of either:

  • the amount of the JobKeeper payment ($1500 per fortnight before tax); or
  • their usual pay for the work they perform during the fortnight (including any paid leave or public holiday pay).

Cecilia White, HR Consulting Director of Perks People Solutions, notes that JobKeeper presents an important consideration for business owners as the staged wage increase is rolled out.

“When calculating how much an employee on JobKeeper needs to be paid, their usual fortnightly pay could be impacted by this wage increase and potentially move them over the $1500 threshold for JobKeeper payments,” she says.

“With that in mind it’s important for business owners to be aware of which group their Award or minimum wage employees fall into and to keep a close eye on their payroll over coming months to ensure they aren’t caught out by these changes.”

 

It may be time for a payroll audit

 As explored in this recent article, there has been a growing list of Australian companies of all sizes who have been caught out underpaying employees.

Cecilia warns that with the staged wage increase roll-out and added complication of JobKeeper, there is the potential for this list to grow even further.

“Most business owners are honest – the last thing they want is to underpay their employees and the penalties for non-compliance are severe,” she says.

“With the  Fair Work Ombudsman’s increasing focus on uncovering cases wage theft, a comprehensive payroll audit will provide reassurance that you are compliant and haven’t missed anything in your systems or processes.”

 

Restructure as a last resort

With the wage increase looming and the foreseeable end of JobKeeper payments merely months away in September, many businesses may find themselves in a financial predicament requiring a restructure to keep afloat.

“Restructure is a last resort, however it may be necessary during this road to recovery for many business owners who are dealing with the loss of revenue, JobKeeper and will have to factor in a wage increase to their expenses,” states Cecilia.

 

 

See below for a complete list of awards in each group:

Group 1

The new minimum wages will start in the following awards from the first full pay period starting on or after 1 July 2020.

  • Aboriginal Community Controlled Health Services Award
  • Aged Care Award
  • Ambulance and Patient Transport Industry Award
  • Banking, Finance and Insurance Award
  • Cemetery Industry Award
  • Children’s Services Award
  • Cleaning Services Award
  • Corrections and Detention (Private Sector) Award
  • Educational Services (Schools) General Staff Award
  • Educational Services (Teachers) Award
  • Electrical Power Industry Award
  • Fire Fighting Industry Award
  • Funeral Industry Award
  • Gas Industry Award
  • Health Professionals and Support Services Award
  • Medical Practitioners Award
  • Nurses Award
  • Pharmacy Industry Award
  • Social, Community, Home Care and Disability Services Industry Award
  • State Government Agencies Award
  • Water Industry Award
  • Back to top

 

Group 2

The new minimum wages will start in the following awards from the first full pay period starting on or after 1 November 2020.

  • Aluminium Industry Award
  • Animal Care and Veterinary Services Award
  • Aquaculture Industry Award
  • Architects Award
  • Asphalt Industry Award
  • Black Coal Mining Industry Award
  • Book Industry Award
  • Broadcasting, Recorded Entertainment and Cinemas Award
  • Building and Construction General On-site Award
  • Business Equipment Award
  • Car Parking Award
  • Cement, Lime and Quarrying Award
  • Clerks—Private Sector Award
  • Coal Export Terminals Award
  • Concrete Products Award
  • Contract Call Centres Award
  • Cotton Ginning Award
  • Dredging Industry Award
  • Educational Services (Post-Secondary Education) Award
  • Electrical, Electronic and Communications Contracting Award
  • Food, Beverage and Tobacco Manufacturing Award
  • Gardening and Landscaping Services Award
  • Graphic Arts, Printing and Publishing Award
  • Higher Education Industry-Academic Staff-Award
  • Higher Education Industry-General Staff-Award
  • Horticulture Award
  • Hydrocarbons Field Geologists Award
  • Hydrocarbons Industry (Upstream) Award
  • Joinery and Building Trades Award
  • Journalists Published Media Award
  • Labour Market Assistance Industry Award
  • Legal Services Award
  • Local Government Industry Award
  • Manufacturing and Associated Industries and Occupations Award
  • Marine Towage Award
  • Maritime Offshore Oil and Gas Award
  • Market and Social Research Award
  • Meat Industry Award
  • Mining Industry Award
  • Miscellaneous Award
  • Mobile Crane Hiring Award
  • Oil Refining and Manufacturing Award
  • Passenger Vehicle Transportation Award
  • Pastoral Award
  • Pest Control Industry Award
  • Pharmaceutical Industry Award
  • Plumbing and Fire Sprinklers Award
  • Port Authorities Award
  • Ports, Harbours and Enclosed Water Vessels Award
  • Poultry Processing Award
  • Premixed Concrete Award
  • Professional Diving Industry (Industrial) Award
  • Professional Employees Award
  • Rail Industry Award
  • Real Estate Industry Award
  • Road Transport (Long Distance Operations) Award
  • Road Transport and Distribution Award
  • Salt Industry Award
  • Seafood Processing Award
  • Seagoing Industry Award
  • Security Services Award
  • Silviculture Award
  • Stevedoring Industry Award
  • Storage Services and Wholesale Award
  • Sugar Industry Award
  • Supported Employment Services Award
  • Surveying Award
  • Telecommunications Services Award
  • Textile, Clothing, Footwear and Associated Industries Award
  • Timber Industry Award
  • Transport (Cash in Transit) Award
  • Waste Management Award
  • Wool Storage, Sampling and Testing Award

 

Group 3

The new minimum wages will start in the following awards from the first full pay period starting on or after 1 February 2021.

  • Air Pilots Award
  • Aircraft Cabin Crew Award
  • Airline Operations-Ground Staff Award
  • Airport Employees Award
  • Alpine Resorts Award
  • Amusement, Events and Recreation Award
  • Commercial Sales Award
  • Dry Cleaning and Laundry Industry Award
  • Fast Food Industry Award
  • Fitness Industry Award
  • General Retail Industry Award
  • Hair and Beauty Industry Award
  • Horse and Greyhound Training Award
  • Hospitality Industry (General) Award
  • Live Performance Award
  • Mannequins and Models Award
  • Marine Tourism and Charter Vessels Award
  • Nursery Award
  • Professional Diving Industry (Recreational) Award
  • Racing Clubs Events Award
  • Racing Industry Ground Maintenance Award
  • Registered and Licensed Clubs Award
  • Restaurant Industry Award
  • Sporting Organisations Award
  • Travelling Shows Award
  • Vehicle Repair, Services and Retail Award
  • Wine Industry Award

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