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Increase to Minimum Wage and High-Income Threshold

New Order or Decree

Author: Naomi Seddon, Shareholder – Littler United States

The Fair Work Commission announced a 1.75% increase to minimum wages. This will apply to all award wages. Increases to awards will start on three different dates for different groups of awards as follows: Group 1 Awards (from July 1, 2020), cover frontline health care and social assistance workers; teachers and child care; and other essential services. Group 2 Awards (from November 1, 2020), cover the construction, manufacturing and a range of other industries. Group 3 Awards (from February 1, 2020), cover accommodation and food services, arts and recreation services, aviation, retail, and tourism. For anyone not covered by an award or an agreement, the new National Minimum Wage will be $753.80 per week or $19.84 per hour. This applies from the first full pay period starting on or after July 1, 2020. The new minimum wage also applies to any work an employee performs while they are in the JobKeeper scheme, if they get their pay rate from an award or the National Minimum Wage.

In addition, the high-income threshold for purposes of unfair dismissals has increased to $153,600 per year. The high-income threshold for unfair dismissals refers to the highest possible income an employee can have, unless they are covered by an award or enterprise agreement, before they are excluded from making an unfair dismissal claim against their employer.

Companies should undertake a review of their employee salary rates and employment contracts to ensure compliance with the modern award amendments as significant penalties can apply for noncompliance.